Mark Carney signs UAE pact to expand Canadian trade beyond the US

Canadian businesses shipping goods to the United Arab Emirates will face lower costs on almost all products under a new trade agreement signed on Tuesday. Prime Minister Mark Carney and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan presided over the ceremony for the Comprehensive Economic Partnership Agreement, or CEPA.

The Prime Minister's Office stated that once fully implemented, the pact will reduce or eliminate tariffs on more than 99 percent of current Canadian exports to the UAE. This change specifically targets sectors such as agriculture, where farmers grow pulses and canola, as well as the aerospace industry and manufacturers of industrial machinery and power generation equipment.

The agreement is expected to enter into force in 2027. Until then, the two nations will work to remove non-tariff barriers and create a more predictable environment for investment. The deal expands market access for Canadian goods and services in industrial, agricultural, forest, fish and seafood, environmental, and engineering sectors.

Carney has pledged to double Canada's non-US trade over the next decade following tariff tensions with the United States. After previous attempts to reach a deal with Washington broke down, the Prime Minister moved to secure partnerships with countries in the Asia Pacific, Europe, and the Middle East. The UAE is already the largest Middle East market for Canadian exports and a major buyer of motor vehicles, parts, and machinery.

Two-way trade between the two countries was worth 3.5 billion Canadian dollars, or 2.48 billion US dollars, last year. Government data show this figure has grown by 10 percent annually for the past few years. The UAE also committed up to 50 billion US dollars in investment in Canada last year.

Canadian Trade Minister Maninder Sidhu signed the deal alongside UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi. Al Zeyoudi said the agreement offers the private sector improved market access and investment opportunities in logistics, communications, advanced technology, and manufacturing. The two countries also signed preliminary agreements on energy, diplomatic, and defence cooperation.

The signing marks a step in Carney's effort to diversify the Canadian economy away from reliance on the United States. The new framework allows Canadian innovators to sell into a market that has shown consistent growth in recent years.