But with its essential reliance on the Spanish mainland, Britain's withdrawal from the open border and customs agreements of the European Union means that Spain can choose to exert crippling economic pressure as a bargaining chip.
British soldiers fighting alongside the Dutch first captured the "Rock", as Gibraltar is known, in 1704, before sovereignty was formally ceded under the Treaty of Utrecht nine years later. But it's a sign of how rough the road ahead could be as the United Kingdom extricates itself from the 28-nation bloc.
Less than a week after Britain triggered the formal process of leaving the European Union, London and Madrid were at loggerheads over Gibraltar, a British-controlled rocky headland on the southern tip of Spain.
The latest spat arose from the EU's Brexit negotiating guidelines which leave Britain and Spain to thrash out what agreements will apply to Gibraltar.
"The risk is that this makes Brexit negotiations more hard when it's in everyone's interests that they go as smoothly as possible", said Christian Hernandez, president of the Gibraltar Chamber of Commerce.
In the shadows of the massive rock pictured above live roughly 30,000 Britons, crowded onto a peninsula whose only land border is with Spain, and by extension, the European Union.
It comes the day after Spain's foreign affairs minister Alfonso Dastis called for calm from the United Kingdom following suggestions from former Tory party leader Michael Howard that Theresa May could be prepared to go to war over Gibraltar's sovereignty.
Lord Howard had said: "Thirty-five years ago this week, another woman Prime Minister sent a taskforce halfway across the world to defend the freedom of another small group of British people against another Spanish-speaking country, and I'm absolutely certain that our current Prime Minister will show the same resolve in standing by the people of Gibraltar".
Shadow foreign secretary Emily Thornberry said: "Having threatened to end security co-operation with the rest of the European Union and failed to mention Gibraltar in her letter to Donald Tusk, the Prime Minister is now refusing to condemn the absurd and unsafe comments made by Lord Howard".
However, Howard fails to note that the Falklands war began with an Argentinian act of aggression when a South American dictator sent troops to occupy a British territory by force.
A British warship is attacked by Argentine bombers during the short but bloody Falklands War in 1982.
His comments raised a few eyebrows in Madrid.
The Royal Navy operates constant patrols of the waters around Gibraltar, which is at the centre of a political tug-of-war between Britain and Spain in the run-up to Brexit.
Conservative lawmaker Dominic Grieve, the head of Parliament's Intelligence and Security Committee, called the remarks "a little bit apocalyptic".
Leading British politicians have condemned the move, with Foreign Secretary Boris Johnson saying the Rock is "not for sale". "I think someone in the United Kingdom is losing the nerve and there is no base for it", stressed the head of Spanish diplomacy during a forum in this capital.
Quoting Winston Churchill, Mrs May said it was "better to jaw-jaw than war-war".
Foreign Secretary Boris Johnson reassured Gibraltarians that the territory's sovereignty "is not going to change and can not conceivably change without the express support and consent of the people of Gibraltar and the United Kingdom".
And Gibraltarians are rightly anxious.
Spain now appears to have some leverage over the United Kingdom when it comes to negotiating a Brexit deal for Gibraltar.
"I would say on Gibraltar, you see now how hard the divorce is", the Netherlands' Bert Koenders told reporters.