99 Percent of Canadian Goods to UAE Will Face Lower Tariffs

The new trade agreement between Canada and the United Arab Emirates will eliminate or reduce tariffs on more than 99 percent of Canadian exports to the Gulf state. Prime Minister Mark Carney and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan signed the Comprehensive Economic Partnership Agreement, or CEPA, on Tuesday. The deal is designed to lower economic barriers and facilitate investment between the two nations.

The Prime Minister's Office stated that full implementation of CEPA will open new markets for key Canadian industries. Specific sectors named in the announcement include farmers growing pulses and canola, manufacturers of industrial machinery and power generation equipment, and the aerospace sector. The office also noted that the agreement addresses non-tariff barriers to create a more predictable environment for trade and investment in industrial, agricultural, forest, fish, seafood, environmental, and engineering fields.

This pact is part of a wider strategy to diversify Canada's trade partners following tensions with the United States. Carney previously pledged to double non-US trade over the next decade after tariffs imposed by US President Donald Trump affected the Canadian economy. Subsequent negotiations with Washington stalled, leading Ottawa to pursue agreements with partners in the Asia Pacific, Europe, and the Middle East. The UAE is currently the largest Middle East market for Canadian exports and a major buyer of motor vehicles, parts, and machinery.

Government data show that two-way trade between the countries reached 3.5 billion Canadian dollars, or 2.48 billion US dollars, last year. That figure has grown by 10 percent annually in recent years. Additionally, the UAE committed up to 50 billion US dollars in investment to Canada last year.

UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi and Canadian counterpart Maninder Sidhu signed the deal. Al Zeyoudi said the agreement offers considerable potential for the private sector. He cited improved market access for exporters and investment opportunities in logistics, communications, advanced technology, and manufacturing as drivers for a resilient and diversified economy. The two governments also signed preliminary agreements on energy, diplomatic, and defence cooperation.

CEPA is scheduled to enter into force in 2027.