99% of Canadian Exports to UAE to Face Zero Tariffs Under New Deal

Canadian Prime Minister Mark Carney and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan signed a new trade pact on Tuesday. The Comprehensive Economic Partnership Agreement, or CEPA, is set to enter into force in 2027. The deal aims to remove most financial barriers between the two economies.

Once fully active, the agreement will reduce or eliminate tariffs on more than 99 percent of current Canadian exports to the UAE. The Prime Minister's Office stated that this change will open new markets for specific Canadian industries. These include farmers producing pulses and canola, manufacturers of industrial machinery, and the aerospace sector.

The pact also targets non-tariff barriers to create a more predictable environment for business. It expands market access for goods and services in several key areas. These sectors cover industrial, agricultural, forest, fish, seafood, environmental, and engineering fields.

This signing follows a period of tension between Canada and the United States. Carney has pledged to double Canada's trade with non-US partners over the next decade. This goal came after tariffs from US President Donald Trump impacted the Canadian economy and subsequent negotiations with Washington failed. The new agreement is part of a broader push to secure deals with countries in Asia, Europe, and the Middle East.

UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi signed the deal alongside his Canadian counterpart, Maninder Sidhu. Al Zeyoudi noted that the agreement offers considerable potential for the private sector. He highlighted improved access for exporters and investment chances in high-growth areas such as logistics, communications, advanced technology, and manufacturing.

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

Beyond the main trade agreement, the two governments signed preliminary deals on energy, diplomatic cooperation, and defence. These additional pacts are intended to deepen the strategic relationship between Ottawa and Abu Dhabi.