Background
At the start of the War of Spanish Succession Portugal had allied with France. As part of this treaty the French had guaranteed the Portuguese naval protection. In 1702, the British navy sailed close to Lisbon on the way to and from Cadiz proving to the Portuguese that the French could not keep their promise. They soon began negotiations with the Grand Alliance about switching sides.
The Methuen treaty was negotiated by John Methuen (c.1650-1706) who served as a member of Parliament, Lord Chancellor of Ireland, Privy Councilor, envoy and then ambassador extraordinary to Portugal where he negotiated the "Methuen" Treaty of 1703; the Treaty cemented allegiances in the War of Spanish Succession.
The early years of the War of Spanish Succession, in Flanders, had been rather fruitless. The Tory party in England was concerned about the cost of the war and felt that naval warfare was a much cheaper option with greater potential for success. Portugal offered the advantage of a deep-water ports near the Mediterranean which could be used to counter the French Naval base at Toulon.
Read more about this topic: Methuen Treaty
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