The Hay–Pauncefote Treaty was a pivotal diplomatic agreement between the United States and Great Britain, signed on November 18, 1901. This treaty specifically nullified the earlier Clayton–Bulwer Treaty of 1850, which had established a framework for both nations to share control over any canal that might be constructed through Central America. The original treaty was rooted in the idea of preventing unilateral control or dominance by either nation over such an essential trade route, which was seen as vital for maritime commerce. However, with the rising interest of the United States in constructing a canal in Panama, the necessity for a new framework arose.

By signing the Hay–Pauncefote Treaty, Britain conceded its long-standing objections to an American-focused canal project. The United States sought to facilitate not only trade but also military movement, linking the Atlantic and Pacific Oceans. This shift was influenced by strategic considerations and the United States' growing assertiveness in regional and global affairs at the beginning of the 20th century. The agreement fostered closer relations between Washington and London and marked a significant turning point in the U.S.'s foreign policy.

The treaty enabled the U.S. to pursue construction of the Panama Canal, which eventually began in 1904 after the United States helped broker a separation agreement for Panama from Colombia. The completion of the canal in 1914 revolutionized international maritime travel by allowing ships to avoid the lengthy and hazardous route around the southern tip of South America. This moment not only transformed global trade but also established the U.S. as a paramount regional power in the Americas and shifted the balance of influence in Central America.