Canada signs trade deal with UAE in push for non-US markets

Canada and the United Arab Emirates have concluded a wide-ranging trade agreement aimed at lowering tariffs and boosting investment. The deal was signed Tuesday in the presence of Canadian Prime Minister Mark Carney and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan. It comes as Ottawa seeks to diversify its trade relationships amid ongoing tensions with Washington.

CEPA to cut tariffs on 99% of exports

The Comprehensive Economic Partnership Agreement, or CEPA, will remove or reduce duties on more than 99 percent of current Canadian shipments to the UAE once fully in force. That’s expected to happen in 2027. Canadian farmers of pulses and canola, along with makers of industrial machinery and power generation equipment, are among those set to gain new market access. The aerospace sector and other innovators will also benefit.

But the pact goes beyond tariffs. It addresses non-tariff barriers and creates a more predictable environment for trade and investment. Canadian goods and services in industrial, agricultural, forest, fish and seafood, environmental, and engineering sectors will see expanded access. Carney has vowed to double Canada’s non-US trade over the next decade, and this deal is a step toward that goal.

Two-way trade between the two countries stood at 3.5 billion Canadian dollars ($2.48bn) last year, growing about 10 percent annually in recent years. The UAE is Canada’s largest Middle East export market and a major buyer of Canadian motor vehicles, parts, and machinery. Last year, the UAE committed up to $50 billion in investment in Canada.

Thani bin Ahmed Al Zeyoudi, the UAE’s foreign trade minister, signed the agreement with his Canadian counterpart Maninder Sidhu. Al Zeyoudi said the UAE sees considerable potential for its private sector, whether through improved market access for exporters or access to investment opportunities in high-growth sectors such as logistics, communications, advanced technology and manufacturing. These will support the UAE’s pursuit of a resilient, diversified and globally connected economy. Alongside the trade pact, the two countries signed preliminary agreements on energy, diplomatic and defence cooperation. Carney has been pursuing trade pacts with countries from the Asia Pacific to Europe and the Middle East after attempts to reach a deal with Washington broke down.