Ottawa, Abu Dhabi: 99% of Exports Face Zero Tariffs

Canada and the United Arab Emirates have formally agreed to eliminate tariffs on the vast majority of goods traded between the two nations.

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, referred to as CEPA, is designed to reduce trade barriers and streamline investment processes for businesses in both countries.

The agreement comes as Carney seeks to reduce Canada's reliance on the United States following the imposition of tariffs by President Donald Trump. Ottawa has pledged to double non-US trade over the next decade after previous negotiations with Washington failed to reach a final accord. Carney has since prioritized trade agreements with partners across the Asia Pacific, Europe, and the Middle East.

The Prime Minister's Office stated that once fully implemented, the pact will lower or remove tariffs on more than 99 percent of current Canadian exports to the UAE. Specific sectors targeted for new market access include farmers producing pulses and canola, makers of industrial machinery and power generation equipment, and the aerospace industry. The agreement also addresses non-tariff barriers to create a more predictable environment for trade.

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

The UAE is currently the largest Middle East market for Canadian exports, purchasing significant volumes of motor vehicles, parts, and machinery. Two-way trade between the countries reached 3.5 billion Canadian dollars, or 2.48 billion US dollars, last year. Government data indicate this trade volume 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.

The governments also signed preliminary agreements on energy, diplomatic, and defense cooperation. CEPA is expected to enter into force in 2027. The deal covers industrial, agricultural, forest, fish and seafood, environmental, and engineering sectors.