Canada and UAE Sign Comprehensive Trade Deal as Ottawa Looks Beyond US Markets

Canada and the United Arab Emirates have signed a comprehensive trade agreement designed to lower barriers between their economies and encourage investment, according to statements from both governments.

Prime Minister Mark Carney and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan presided over the signing of the Comprehensive Economic Partnership Agreement, known as CEPA, on Tuesday. The pact aims to reduce tariffs, cut red tape and improve market access for businesses in both countries.

The agreement arrives as Carney works to widen Canada's trade and investment ties amid tension with the United States. He has pledged to double Ottawa's non-US trade over the next decade, after tariffs imposed by US President Donald Trump rippled through the Canadian economy. Later attempts to reach a deal with Washington broke down, pushing Carney to pursue trade pacts aggressively with countries from the Asia Pacific to Europe and the Middle East.

In a statement, the Prime Minister's Office said that once fully implemented, CEPA will reduce or eliminate tariffs on more than 99 percent of current Canadian exports to the UAE. It said this would open new markets for farmers growing pulses and canola, manufacturers of industrial machinery and power generation equipment, the aerospace sector and other Canadian innovators.

The office added that the agreement will also tackle non-tariff barriers, create a more predictable environment for trade and investment, and expand market access for Canadian goods and services. The sectors named include industrial, agricultural, forest, fish and seafood, environmental and engineering. CEPA is expected to enter into force in 2027.

The two countries also signed preliminary agreements on energy, diplomatic and defence cooperation.

UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi, who signed the deal with Canadian counterpart Maninder Sidhu, said the agreement holds considerable potential for the private sector. He pointed to improved market access for exporters and investment opportunities in high-growth areas such as logistics, communications, advanced technology and manufacturing, all of which he said would support a resilient, diversified and globally connected economy.

The UAE is already the largest Middle East market for Canadian exports and a major buyer of Canadian motor vehicles and parts, as well as machinery. Two-way trade between the countries was worth 3.5 billion Canadian dollars ($2.48bn) last year, and government data show it has been growing by 10 percent annually for the last few years. The UAE also committed up to $50bn in investment in Canada last year.