The most common and most likely answer to this crossword clue is the 5 letter word GHENT
I've seen this crossword clue in Financial Times
G
H
E
N
T
More clues leading to the result GHENT
- Fellow gets hot in foreign city
- Belgian city good, then bad
- City has good hospital department for otolaryngology
- Hotel secured by fellow in European city
- Bloke outside hotel, source of good news brought to Aix?
- City’s hotel in short somewhere for a chap to go
- Bird boarding snazzy car in European city
- Well-bred chap outside hotel in treaty town
- Layer within great city
- City providing information about home debut of Tevez
Buddy explains!

The straight part
We know that "treaty town" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case treaty town = ghent.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.