The Arana–Southern Treaty emerged from a series of diplomatic negotiations aimed at resolving tensions between Great Britain and Argentina, particularly surrounding issues of navigation rights on the Río de la Plata. British interests were significantly invested in the region due to trade, agriculture, and shipping routes, while Argentina sought to assert its sovereignty following independence from Spain. Prior to the treaty, conflicts had arisen over access to navigating key waterways, which were essential for British merchant vessels. The ratification marked a pivotal shift in diplomatic relations, culminating from efforts to establish shared economic frameworks and avoid military confrontations.

Under the treaty, both nations agreed to principles that would govern navigation and trade, facilitating British merchants' access while respecting Argentina's sovereign rights. This legal framework was crucial for Argentina's economic development, as it allowed foreign investments, particularly from Britain, which was one of the world’s leading economic powers at the time. The treaty did not only focus on navigation rights but also included provisions for resolution of future disputes, showcasing a mutual commitment to peaceful relations.

The ratification of the Arana–Southern Treaty signified the beginning of a more structured economic relationship between Argentina and Great Britain. By improving the stability of trade operations and reducing hostilities, it set a precedent for further agreements between the two nations in subsequent decades. The treaty also facilitated an influx of British investments in railroads and agriculture, solidifying Britain's role as a vital economic partner in Argentina's development.