Canada and the United Arab Emirates signed a comprehensive trade agreement Tuesday aimed at reducing trade barriers and attracting investment, as Canadian Prime Minister Mark Carney seeks to diversify economic partnerships amid strained relations with the United States.
Carney and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan presided over the signing of the Comprehensive Economic Partnership Agreement (CEPA), which aims to cut tariffs, reduce red tape and improve market access for businesses in both countries.
Carney has vowed to double Canada's non-U.S. trade over the next decade as President Donald Trump's tariffs have rippled through Canada's economy. Subsequent attempts for a deal with Washington have broken down, and that has pushed Carney to aggressively pursue trade pacts with countries from the Asia Pacific to Europe and the Middle East.
"Once fully implemented, the CEPA will reduce or eliminate tariffs on over 99% of current Canadian exports to the UAE. That means new markets for Canadian farmers growing pulses and canola, for manufacturers of industrial machinery and power generation equipment, for our world-class aerospace sector, and other Canadian innovators," The Prime Minister's Office said in a statement.
"The agreement will also address non-tariff barriers, create a more predictable environment for trade and investment, and expand market access for Canadian goods and services, including in the industrial, agricultural, forest, fish and seafood, environmental, and engineering sectors," it said, adding CEPA is expected to enter into force in 2027.
The two countries also signed preliminary agreements on energy, diplomatic and defence cooperation.
"We see considerable potential for our private sector, whether through improved market access for our exporters or access to investment opportunities in high-growth sectors such as logistics, communications, advanced technology and manufacturing - all of which will support our pursuit of a resilient, diversified and globally connected economy,” UAE's Foreign Trade Minister Thani Al Zeyoudi said in a statement.
He signed the CEPA deal with his Canadian counterpart Maninder Sidhu.
UAE is the largest Middle Eastern market for Canadian exports and is a big buyer of Canadian motor vehicles and parts, and machinery. Two-way trade between the countries was worth C$3.5 billion ($2.48 billion) last year. It has been growing at 10% annually for the last few years, according to government data.
The UAE last year also committed up to $50 billion in investment in Canada.
The signing is the last step before Canada’s Parliament can ratify the agreement, a Canadian government source said.
