Carney and UAE Crown Prince Sign Trade Pact to Reduce Tariffs

Prime Minister Mark Carney and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan signed a comprehensive trade agreement on Tuesday, establishing a new economic framework between Canada and the United Arab Emirates. The deal, known as the Comprehensive Economic Partnership Agreement or CEPA, is designed to lower commercial barriers and stimulate cross-border investment.

The agreement responds to ongoing trade tensions between Ottawa and Washington. After tariffs imposed by US President Donald Trump impacted the Canadian economy and subsequent negotiations with the United States stalled, Carney moved to expand trade links with regions including Asia, Europe, and the Middle East. He has set a target to double Canada's non-US trade volume within the next ten years.

According to the Prime Minister's Office, full implementation of CEPA will remove or reduce tariffs on more than 99 percent of current Canadian exports to the UAE. This change is expected to benefit specific industries, including agricultural producers of pulses and canola, manufacturers of industrial machinery and power generation equipment, and the aerospace sector. The office stated the pact will also address non-tariff barriers to create a more predictable environment for business.

The agreement covers a wide range of economic activities, expanding market access for goods and services in the industrial, agricultural, forest, fish, seafood, environmental, and engineering sectors. Government data indicates that CEPA is scheduled to enter into force in 2027. In addition to the main trade pact, the two nations signed preliminary agreements regarding energy, diplomatic, and defense cooperation.

UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi, who signed the deal alongside Canadian counterpart Maninder Sidhu, described the agreement as holding considerable potential for the private sector. He identified logistics, communications, advanced technology, and manufacturing as high-growth areas where improved market access and investment opportunities could support a diversified economy.

The UAE is currently the largest Middle East market for Canadian exports and is a major buyer of motor vehicles, parts, and machinery. Two-way trade between the countries reached 3.5 billion Canadian dollars, or 2.48 billion US dollars, last year. Government records show this trade volume has grown by 10 percent annually for the past few years. Additionally, the UAE committed up to 50 billion US dollars in investment to Canada last year.