This was the American, British and Canadian first military agreement (hence the designation) reached at the secret Washington conference between the senior military staffs of the three countries (29 January/27 March 1941).

The American-British Staff Conference Report of 1941 established the general military concepts, resources and deployment strategies for a joint Allied military strategy. The plan assumed that if the USA went to war with Germany, it would probably also go to war with Italy and Japan.

The general principles of agreement stated that the USA’s territorial interest was in the western hemisphere; that the security of the the UK and its empire and commonwealth must be maintained in all circumstance including the retention of a Far East position; and that the security of maritime communications between the Allied powers was essential.

The agreed offensive policies included the early elimination of Italy as an Axis partner; the support of neutral states and underground groups in resistance to the Axis powers; a sustained air offensive to destroy Axis military power; a build-up of forces for the eventual offensive against Germany and if necessary the capture of territory from which to launch that offensive; and agreement that the Atlantic and European areas were the 'decisive theatre' and, as such, would therefore be the primary focus of US military efforts, although the 'great importance' of the Middle East and Africa were also noted.

This agreement generally accorded with the USA’s existing 'Rainbow-5' concept already accepted by President Franklin D. Roosevelt, and thereafter embodied the concept of 'Germany first' to characterise the Allied determination that should Nazi Germany declare war on the USA, Germany would be the primary enemy, and that all major efforts would therefore be devoted to the defeat of Germany before significant forces were allocated for anything but operations of a holding or attritional nature against Japan. The agreement specified that the initial measures to be taken against Germany would be a blockade, air attack and subversion.

The plan was initially accepted only on an informal basis, but was in effect ratified at the 'Arcadia' conference in Washington during December 1941. This resulted in the US Navy’s reinforcement of its forces operating in the Atlantic, and also of the despatch to Far Eastern waters of the new British battleship Prince of Wales and old battle-cruiser Repulse. This was in accordance with the consensus that the security of the British commonwealth and empire, including the retention of a Far East position, had to be maintained under any and all circumstances. The third cornerstone of the three powers' agreement was that the security of sea communications between the Allied powers was essential.

Finally, it was agreed that should Japan enter the war, the Allied military in the Far East would initially be defensive.

Although the ABC-1 agreement was not a military alliance, it nevertheless signalled that the USA was preparing to enter the war on the side of the Allied powers, that the USA would endeavour to maintain the security of the British commonwealth, and that the US military forces were modifying existing war 'Rainbow' plans to incorporate military integration and co-operation with the forces of other Allied nations.