The Hay–Bunau–Varilla Treaty was the culmination of a complex series of negotiations between the United States and Colombia, which had previously controlled the Isthmus of Panama. In 1899, the United States and Colombia signed the Hay–Herrán Treaty, which would have granted the United States similar rights to build the Panama Canal, but the Colombian Senate rejected the treaty in 1903.
In response, the United States supported a Panamanian rebellion against Colombian rule, and the Republic of Panama was declared independent on November 3, 1903. The United States quickly recognized the new Panamanian government and signed the Hay–Bunau–Varilla Treaty with Panama on November 18, 1903.
The Hay–Bunau–Varilla Treaty has been a source of controversy and resentment in Panama, and it has been amended several times over the years to address concerns about Panamanian sovereignty. In 1977, the United States and Panama signed the Torrijos-Carter Treaties, which agreed to transfer control of the Panama Canal and the Canal Zone to Panama by the end of the 20th century. The handover was completed on December 31, 1999.