The Treaty of El Pardo signed on 11 March 1778 sought to end conflict between Spain and Portugal in the Río de la Plata region, along the modern boundary between Argentina and Uruguay.

Spain entered the Seven Years' War on the side of France in 1762; their invasion of Portugal ended in disaster, but they captured Colonia del Sacramento and lands now in the southern Brazilian state of Rio Grande do Sul.

Although forced to return Colonia del Sacramento and other Portuguese possessions under Article XXI of the 1763 Treaty of Paris, Spain retained its gains in Rio Grande, since they argued these lands were in fact Spanish.

[6][a] Spanish hopes the border settlement would assist economic growth were hampered by the 1779–1783 war with Britain, which restricted trade with mainland Spain and led to high tariffs and taxes to pay for it.

[7] Links between the Spanish central government and their overseas possessions were weakened during the Napoleonic Wars, while Portugal regained the Misiones Orientales in 1801, but despite this, the colonists successfully repulsed British invasions of the River Plate in 1806 and 1807.