Canada, UAE pact cuts 99% export tariffs

Canadian exporters will face reduced or zero tariffs on more than 99 percent of their goods sold to the United Arab Emirates under a new trade pact. Prime Minister Mark Carney and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan signed the Comprehensive Economic Partnership Agreement on Tuesday. The deal aims to lower trade barriers and encourage investment between the two nations.

The agreement targets specific industries for market expansion. The Prime Minister's Office identified farmers growing pulses and canola, manufacturers of industrial machinery and power generation equipment, and the aerospace sector as key beneficiaries. The pact also addresses non-tariff barriers to create a more predictable environment for business. Officials expect the agreement to enter into force in 2027.

Ottawa has moved to diversify its trade partners following tensions with the United States. Carney pledged to double Canada's non-US trade over the next decade after tariffs imposed by President Donald Trump affected the domestic economy. Subsequent negotiations with Washington failed, prompting Carney to pursue agreements in the Asia Pacific, Europe, and the Middle East.

UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi signed the deal with Canadian counterpart Maninder Sidhu. Al Zeyoudi stated that the agreement offers potential for the private sector, particularly in logistics, communications, advanced technology, and manufacturing. He described these areas as supporting a resilient and diversified economy.

The two governments also signed preliminary agreements on energy, diplomatic, and defence cooperation. These side deals complement the primary trade framework. The UAE is currently the largest Middle East market for Canadian exports. It is a major buyer of motor vehicles, parts, and machinery.

Two-way trade between the countries reached 3.5 billion Canadian dollars in the previous year. Government data indicate that this trade value has grown by 10 percent annually in recent years. The UAE also committed up to 50 billion US dollars in investment in Canada last year.

The next step is the formal implementation of the treaty provisions. The agreement must be ratified before it can take effect. The target date for entry into force is set for 2027.