Canada and the United Arab Emirates have signed a comprehensive trade agreement designed to lower barriers between their economies and boost investment, as Prime Minister Mark Carney pushes to expand Canada's non-US trade amid tension with Washington.
The Comprehensive Economic Partnership Agreement (CEPA) was signed on Tuesday, with Prime Minister Mark Carney and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan presiding over the signing. It aims to cut tariffs, reduce red tape and improve market access for businesses in both countries.
The Prime Minister's Office said the agreement will reduce or eliminate tariffs on more than 99 percent of current Canadian exports to the UAE once fully implemented. "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 office said in a statement.
The statement added that 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 across industrial, agricultural, forest, fish and seafood, environmental, and engineering sectors. The 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 said there was considerable potential for the private sector, including improved market access for exporters and access to investment opportunities in high-growth sectors such as logistics, communications, advanced technology and manufacturing.
The UAE is the largest Middle East market for Canadian exports and a major buyer of Canadian motor vehicles and parts, and machinery. Two-way trade between the countries was worth 3.5 billion Canadian dollars ($2.48bn) last year and has been growing at 10 percent annually for the last few years, according to government data. The UAE also committed up to $50bn in investment in Canada last year.
The deal comes as Carney has pledged to double Ottawa's non-US trade over the next decade, after US President Donald Trump's tariffs rippled through the Canadian economy and subsequent attempts to reach a deal with Washington broke down.
Analysis
Why This Matters
- The deal is part of Canada's effort to reduce its economic dependence on the United States, a major shift after US tariffs disrupted two-way trade.
- For the UAE, it locks in access to a developed Western market and deepens investment ties, building on a $50bn investment commitment made last year.
- With implementation scheduled for 2027, the agreement's practical effects on tariffs and market access will unfold gradually.
Background
Canada and the UAE have steadily expanded trade in recent years, with the UAE now the largest Middle East market for Canadian exports. The new agreement is one of several trade deals Ottawa has pursued as US President Donald Trump's tariffs have created uncertainty for Canadian exporters. Carney has pledged to double Canada's non-US trade over the next decade, pushing for agreements with partners from the Asia Pacific to Europe and the Middle East after talks with Washington broke down.
Key Perspectives
Canadian Prime Minister's Office: Says the CEPA will reduce or eliminate tariffs on more than 99 percent of current Canadian exports to the UAE, opening markets for farmers, manufacturers, the aerospace sector and other innovators.
UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi: Sees considerable potential for the private sector through improved market access and investment opportunities in high-growth sectors, supporting a resilient, diversified and globally connected economy.
What to Watch
- Whether the CEPA enters into force as scheduled in 2027 and how quickly tariff reductions take effect.
- Progress on the preliminary agreements on energy, diplomatic and defence cooperation.
- Whether Canadian exports to the UAE and other non-US markets grow enough to offset the impact of US tariffs.
Checked
12 claims in this story checked against 1 source: 11 supported.
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- SupportedCanada and the UAE signed a comprehensive trade deal amid a push to reduce reliance on the US.Al Jazeera – Breaking News, World News and Video from Al Jazeera: “Canada and the United Arab Emirates have signed a comprehensive trade deal to lower barriers between the economies and boost investment, the governments have said.”
- Partly supportedThe agreement aims to eliminate tariffs on more than 99 percent of Canadian exports to the UAE.Al Jazeera – Breaking News, World News and Video from Al Jazeera: “Once fully implemented, the CEPA will reduce or eliminate tariffs on over 99 percent of current Canadian exports to the UAE”
- SupportedThe agreement is designed to lower barriers between the economies and boost investment.Al Jazeera – Breaking News, World News and Video from Al Jazeera: “signed a comprehensive trade deal to lower barriers between the economies and boost investment”
- SupportedCarney is pushing to expand Canada’s non-US trade amid tension with Washington.Al Jazeera – Breaking News, World News and Video from Al Jazeera: “The deal comes as Canadian Prime Minister Mark Carney seeks to expand trade and investment ties amid tension with the United States.”
- SupportedCarney and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan presided over the signing on Tuesday.Al Jazeera – Breaking News, World News and Video from Al Jazeera: “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) on Tuesday”
- SupportedThe Prime Minister’s Office said: “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.”Al Jazeera – Breaking News, World News and Video from Al Jazeera: ““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.””
- SupportedThe CEPA is expected to enter into force in 2027.Al Jazeera – Breaking News, World News and Video from Al Jazeera: “adding that CEPA is expected to enter into force in 2027.”
- SupportedThe countries also signed preliminary agreements on energy, diplomatic and defence cooperation.Al Jazeera – Breaking News, World News and Video from Al Jazeera: “The two countries also signed preliminary agreements on energy, diplomatic and defence cooperation.”
- SupportedTwo-way trade was worth 3.5 billion Canadian dollars ($2.48bn) last year.Al Jazeera – Breaking News, World News and Video from Al Jazeera: “Two-way trade between the countries was worth 3.5 billion Canadian dollars ($2.48bn) last year.”
- SupportedTwo-way trade has been growing at 10 percent annually for the last few years, according to government data.Al Jazeera – Breaking News, World News and Video from Al Jazeera: “It has been growing at 10 percent annually for the last few years, according to government data.”
- SupportedThe UAE committed up to $50bn in investment in Canada last year.Al Jazeera – Breaking News, World News and Video from Al Jazeera: “The UAE also committed up to $50bn in investment in Canada last year.”
- SupportedCarney has pledged to double Ottawa’s non-US trade over the next decade.Al Jazeera – Breaking News, World News and Video from Al Jazeera: “Carney has pledged to double Ottawa’s non-US trade over the next decade”