Carney Signs Trade Pact With UAE to Offset US Tariffs

Canadian Prime Minister Mark Carney and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan signed a comprehensive trade agreement on Tuesday. The pact, known as CEPA, aims to lower barriers between the two economies.

The deal will reduce or eliminate tariffs on more than 99 percent of current Canadian exports to the UAE. This move opens new markets for specific Canadian industries. Farmers who grow pulses and canola will see improved access. Manufacturers of industrial machinery and power generation equipment also benefit. The aerospace sector and other innovators are included in the agreement's scope.

Carney signed the deal as part of a broader strategy to diversify Canada's trade partners. Tensions with the United States prompted this shift. US President Donald Trump imposed tariffs that rippled through the Canadian economy. Later attempts to reach a deal with Washington broke down. Carney pledged to double Ottawa's non-US trade over the next decade. He has pursued pacts with countries in the Asia Pacific, Europe, and the Middle East.

The agreement also targets non-tariff barriers to create a more predictable environment for trade and investment. It expands market access for Canadian goods and services in several sectors. These include industrial, agricultural, forest, fish and seafood, environmental, and engineering fields. The pact is expected to enter into force in 2027.

Beyond the main trade agreement, the two nations signed preliminary deals on energy, diplomatic, and defense cooperation. Maninder Sidhu, Canada's trade minister, signed the deal alongside UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi. Al Zeyoudi stated the agreement holds potential for the private sector. He cited improved market access for exporters and investment opportunities in high-growth areas. These areas include logistics, communications, advanced technology, and manufacturing.

The UAE 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 countries reached 3.5 billion Canadian dollars, or 2.48 billion US dollars, last year. Government data show this trade has grown by 10 percent annually for the last few years. The UAE also committed up to 50 billion US dollars in investment in Canada last year.