The war continued until January 20, but it was widely accepted that it was for all purposes over. No military actions were taken during the year of 1816 in the New England War of Independence. During this time New England had begun rebuilding land damaged in the war and building up a trading fleet. Hoping to become a economic leader of the Americas, they purchased goods, ships, and ports from various European nations. One area they sold lots to was Spain, who was purchasing vast amounts of guns and supplies to pacify her rebelling colonies.
They were also interested in Haiti. Haiti was along with New England and the US was one of the only independent North Americans nations. They were poor compared to New England, and so New England contacted them, trying to arrange diplomatic relations and trade deals.
On January 20, Rufus King of the Federalists was sworn into office and he called for negotiations with the Republic of New England. On February 16 the Treaty of New Haven was signed. This treaty recognized the Republic of New England, paid war reparations and agreed to immediate diplomatic relations. This involved both sides sending an embassy to the other. With hostilities dissolved, people on both sides on the border could cross easily. This also meant that New England could deal with the US economy, which was one of the first actions of the Embassy in D.C.
On November 15, 1816 the Republic of New England signed an trade agreement with the U.S. agreeing for lowered tariffs on each other's products and no embargoes or economic restrictions to be placed on the other. This was a great success for both sides. New England could maintain their various trade networks in the US, and expand them, and the US economy was able to recover somewhat with connections to the major economic center restored.
With the Federalists in charge of the United States government, and the Liberty Party (basically the federalist) in charge of New England, they shared similar political views. And since most had known each other before the war, they felt a bond. Both of these helped prevent a total cold war. But relations were still frosty, with the Americans viewing the New Englanders as traitors and the New Englanders viewing the Americans as corrupt.
Also of annoyance to the US were the Shawnee Confederacy, who now meant an independent protected Native American nation bordering the US. While the nation was disorganized and not at all westernized, it presented several problems. The fist and most obvious was the exodus of White settlers from the frontier. Tens of thousands were now fleeing the Shawnee Confederacy to the US. This posed a serious immigration policy for border states, who now had to place thousands of people each into their lands. And since most of the "unoccupied" lands were full of Native Americans, supported by the Shawnee, huge border conflicts were occurring.
For Native American groups were more determined to gain independence, upon seeing it was possible. Although many groups fled to the Shawnee Confederacy, many stood their ground, determined to keep their ancient lands. These groups were all helped by the Shawnee, who personally led massacres and attacks in US territory. Since the US couldn't prove it was the Shawnee, they couldn't react. This didn't stop Kentucky, who had been the target of the majority of these raids and whose rivalry was inflamed, from leading expeditions to massacre Shawnee tribes close to the border.
The United States of America went through a period of strict Federalism during this time. The Federalist had the presidency, a majority in both houses, and most state positions. The USA during this time became very centralized, and while nearly as much as it would be later on, the states clearly lost power. While the other parties remained, the government refused to acknowledge their existence. No open government position was given to a non-Federalist as this might be seen as a chance for the Democratic-Republicans to come back. No mention of them was made in any speech. Never were laws favoring other parties passed.
The US, in an effort to keep their remaining lands, led a mass migration into all lands east of the Mississippi to prevent them from forming Native American nations. While the local tribes tried to stop it, they were badly outnumbered everywhere by the end of 1820, and most were forced to move. Some fled to the Shawnee Confederacy, praising itself on its acceptance of non white (although they didn't allow blacks). Others fled to the Plains natives, who began destroying all American settlements west of the Mississippi River. While they couldn't drive them out of Louisiana, they managed to drive them out of most of Arkansas and everywhere else.
Many also fled to Canada at the time, along with blacks escaping slavery. Following them were large numbers of Anglo-Americans whi were running from the Federalized US. Many from France and Louisiana fled to Quebec, raising the French area. All were accepted, but they had to assimilate. The settlers did and soon Canada's population was small but significant enough that the US annexing it in a short war was out of the question. Even those originating from the US switched their loyalty to the crown, as they thought it better for the most part. Many were forced to prove their loyalty by serving one year in the military, now manning various outposts along the border.
The Shawnee were doing great, comparative to their friends in the USA. They were receiving huge number of immigrants, all of which were Native of course. Many were settling down in permanent towns and villages, but the Shawnee were conflicted on how far they were going to westernize. For now they let the individual tribes decide, while they as a whole continued to receive aid from Great Britain, mostly medical supplies and guns. They supported Plains tribes in their fight against the white men, which had the double bonuses of spreading their currency, the Wampum. The Wampum, made from seashells, couldn't be duplicated further inland and was therefore able to avoid hyperinflation.
The Republic of New England was busy setting up embassies with the world. By the end of 1820 they had set up embassies and relations with most of the great powers, and their primary goals was economic and trade deals. They succeeded and several nations agreed to economic deal lowering tariffs, giving rights to certain ports and resources, and building trade ships. New England at the time didn't make any official alliances as they were not interested in getting caught up in the games of the Great Powers. However, they were particularly close to France and Haiti. Haiti because they wished to dominate the continent economically and Haiti seemed an easy start, and France because of good relations previous to the War of Independence. Spain was having some difficulty with Florida during this time, as the border was highly disputed. Spain claimed it went all the way to the Mississippi river, while the US claimed it stopped before that. The settlers coming into Florida from the US didn't help either, as may wised to make their new land part of the US. And with so much of Spain's America gone, and the rest soon to be, Spain kept a strict rule over Florida. All of it was occupied by Spain, and soldiers were in every town. Presidios and missions were built along the Mission. Spain was determined to keep some of their once vast colonial empire. The US tried to recover it but the Federalist refused to go to war or give it up, so the border remained disputed.
In the United States if America, the Federalists were elected into office again in the 1820 elections, to very few people's surprise. The Democratic-Republican Party was mostly gone by this point, but the Federalist still refused them to occupy any position. By this point in the parties denegration, any anti-Federalist bill passed or Democratic-Republican elected could lead to a revival In the two party system. But while the Democratic-Republicans were almost certain to be gone by this point, the Federalists were becoming unstable in their complete dominance.
With the shock of the wars fading, many in the south bean remembering that they were against a strong central government. Several minor parties splintered off in the south during this time, each trying to replace the Democratic-Republicans as a major political party. While none had done so yet, two parties in particular were of significant size: the Constitution Party and the Freedom Party.
Both of these had several thousand members and growing, and with supporters of the Democratic-Republicans in shame and the Federalist weakened, both looked like they would become major parties. The main difference between the two were that the Constitution Party favored a strict reading of the Constitution and Bill of Rights, while the Freedom Party was more lenient. Also a major area of argument was expansion, which the Constitution Party supported and the Freedom Party was against.
In the Republic of New England the Liberty Party remained the dominant party, controlling every branch of the government in excess. There was only one other party worth noting, the Democratic Party. The Democratic Party was in favor of a weaker government and more power to individual companies, the opposite of the Liberty Party. The Democratic Party had its biggest strongholds in Vermont and Rhode Island, the only places where more than 20% of the population voted Democratic. This was expected by New England, as the two had always been less nationalist to the New England cause and conservative (Although since they wished change to New England, here they were technically liberal).
In 1824 the Democratic Party and the Freedom Party made the International Freedom Organization, a collection of political parties that work together for common goals. This was joined by the Liberal Party of Haiti and the Conservative Party of Central America. This was the first alliance of political parties and was unstable at first, with no precedent. However it quickly grew stable and stronger.
Haiti was doing better than in OTL during this time. With large amounts of aid and economic support from New England, it has several ports of importance and this in turn brought many jobs and money to Haiti. With the effects from the rebellion dying down and the nation needing industrial supplies, New England was an useful ally. Haiti also needed help dealing with the Dominican Republic. New England did help calm revolts, but forced Haiti to treat the Dominicans equally. Thus the eastern part of the nation was less harshly treated and didn't revolt nearly so much, particularly with the Haitians supplying all sorts of resources mostly from New England).
Spain was busy setting up Missions and Presidios in Florida, having lost mot of its remaining empire by now. While the settlements helped Spain control the land, conflicts in western Florida remained, the US couldn't demand western Florida as it was barred from expanding, it tried to convince the people there to secede. Luckily for Spain, enough were loyal that the US failed at this job, and the disputed area remained in Spain's control. Still, several thousand Spaniards were shipped to Florida to reinforce control.
Mexico is plagued with multiple rebellions throughout its lands, with even Texas staging some rebelliousness. Santa Anna is trying to cut the fighting out, but Mexico id unstable. Frontier lands are poorly kept under national rule and many wish to become their own nation or join another. Texas is suffering from that problem as well, with even more settles arriving from the US than in OTL. Texas is allowed some anonymity, but independence movement there is growing stronger. Yucatan is considering joining United States of Central America, which would cause even more problems for Mexico as with New England help Central America is more stable and built up than in OTL.