Over 1794, John Jay, the former Chief Justice of the United Status Supreme Court, and William Wyndham Grenville, Lord Grenville, Foreign Minister of the British Empire, met several times to negotiate a treaty between their respective governments. Jay's primary goals were a compensation for plundered merchant ships and an evacuation of British troops from American territory. Britain sought favored-nation trading status and assurance that American debtors would pay their pre-war obligations to their British creditors. The terms settled were, on an objective judgement, heavily in favor of Britain, but then, they were a world superpower and America was a collection of former colonies trying to establish itself as a nation.

The United States did get most of their primary objectives. Article II returned control of Western posts to America, which would let Washington establish the U.S. authority and gain loyalty over those inhabiting the area. They also settled reciprocal trading priveleges with the Canadian Indians, and decided to set up mixed commissions to settle the Northeastern border and the source of the Mississippi. Article VII promised the greatly-sought compensation for seizures of American vessels by British ships in the Caribbean, and Article XIII gave the United States special trading priveleges with the British East Indies.

The trading priveleges with the British West Indies were less positive. Americans were granted some trade with British ports, but the British, as part of a protective economic policy, would not allow American merchants to sell tropical produce to British colonies. When America ceded the measure, there was likely a presumption that dependence on American grain, lumber, and more, would cause the New World merchants to ignore the treaty in favor of trade.

In the British interest, favored nation status was granted, creating smooth economic conditions between the two English-speaking countries, even in the unfortunate event of war between the two. Article XV prohibited the discriminatory tarriffs and tonnage duties used by some American states to give more equal ground for trade. A commission was orderd to be established by Article 6 to smooth out the legal issues of British-American creditor-debtor obligations. The British privateers were also granted access to U.S. harbors, and both the U.S. and Britain agreed not to receive privateers of either's enemies. America was forced to accept the British definition of neutrality, which gave them the ability to confiscate enemy property on neutral ships, including food and provisions, though these latter goods would be compensated. Finally, the British evaded being forced to compensate American slaveholders for the abduction of slaves during the Revolutionary War.