Trade Expansion: Canada and UAE Seal Deal Covering 99% of Goods

More than 99 percent of current Canadian exports to the United Arab Emirates will face zero tariffs once the new trade pact is fully implemented. Prime Minister Mark Carney and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan signed the Comprehensive Economic Partnership Agreement, or CEPA, on Tuesday. The deal aims to reduce tariffs and cut bureaucratic hurdles for businesses in both nations.

The agreement targets specific Canadian industries that rely on access to foreign markets. The Prime Minister's Office stated that the pact will open new sales channels for farmers producing pulses and canola. It will also benefit manufacturers of industrial machinery and power generation equipment, as well as the aerospace sector. These provisions are designed to lower costs and simplify the process for moving goods across borders.

Ottawa is pushing this deal to reduce its dependence on the United States. Carney pledged to double Canada's trade with non-US partners over the next decade. This goal follows the imposition of tariffs by US President Donald Trump, which negatively affected the Canadian economy. Previous efforts to reach a trade deal with Washington failed, prompting Carney to seek agreements with partners in Asia, Europe, and the Middle East.

The CEPA framework includes provisions for energy, diplomatic, and defense cooperation. UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi signed the main agreement alongside Canadian counterpart Maninder Sidhu. Al Zeyoudi noted that the deal creates investment opportunities in logistics, communications, advanced technology, and manufacturing. He described these areas as key to building a resilient and diversified economy.

The UAE is currently the largest Middle East market for Canadian exports. It is a major buyer of Canadian motor vehicles, parts, and machinery. Two-way trade between the two countries reached 3.5 billion Canadian dollars, or $2.48 billion, last year. Government data indicates that this trade volume has grown by 10 percent annually in recent years. Last year, the UAE also committed up to $50 billion in investment to Canada. The new agreement is expected to enter into force in 2027.