Carney and UAE Crown Prince Sign Trade Pact to Cut Tariffs on Canadian Goods

Canadian exporters of pulses, canola, industrial machinery, and aerospace components will face reduced or eliminated tariffs on more than 99 percent of their goods when the new trade pact with the United Arab Emirates is fully implemented. The Prime Minister's Office announced that the Comprehensive Economic Partnership Agreement, or CEPA, is designed to remove red tape and improve market access for businesses in both nations. Once active, the deal is expected to open new avenues for farmers, manufacturers, and innovators seeking to move products into the Gulf market.

Prime Minister Mark Carney and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan presided over the signing ceremony on Tuesday. The event took place as Carney works to diversify Canada's economic relationships following strained trade talks with the United States. Carney has pledged to double Ottawa's non-US trade volume over the next decade, a goal accelerated by tariffs imposed by President Donald Trump and the subsequent breakdown of negotiations in Washington. These developments pushed the Canadian government to pursue agreements aggressively with partners in Asia Pacific, Europe, and the Middle East.

The timeline for the agreement’s impact is set for 2027, when CEPA is expected to enter into force. Until then, the two nations have already secured preliminary agreements on energy, diplomatic, and defence cooperation. The deal targets specific sectors including industrial, agricultural, forest, fish and seafood, environmental, and engineering industries. By addressing non-tariff barriers, the government aims to create a more predictable environment for cross-border investment and commerce.

Maninder Sidhu, Canada's foreign trade minister, signed the document alongside UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi. Al Zeyoudi stated that the agreement holds considerable potential for the private sector. He noted that improved market access would support investment in high-growth areas such as logistics, communications, advanced technology, and manufacturing. These sectors, he said, are key to supporting a resilient and globally connected economy.

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

The signing marks a concrete step in Carney's strategy to offset the impact of US tariffs by widening trade ties. The agreement covers a broad range of goods and services, ensuring that Canadian producers can compete with fewer financial hurdles. The specific focus on agricultural and industrial goods reflects the existing trade patterns between the two countries. As the agreement moves toward its 2027 effective date, businesses in the named sectors will prepare for the changes in tariff structures and regulatory frameworks.