Canada-UAE trade deal: tariffs cut on 99% of exports

Canada and the United Arab Emirates signed a Comprehensive Economic Partnership Agreement in Ottawa on Tuesday, 27 October, as Prime Minister Mark Carney hosted the Crown Prince of Abu Dhabi, Sheikh Khaled bin Mohamed bin Zayed Al Nahyan. Once it is fully in force, the agreement will reduce or eliminate tariffs on more than 99% of current Canadian exports to the UAE. It is expected to enter into force in 2027. The two sides also launched a strategic partnership and signed defence, energy and diplomatic-training agreements.

The trade agreement

The agreement was negotiated in 47 days, which Canada's prime minister's office describes as the fastest either country has negotiated a free trade agreement. UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi and Canada's Minister Maninder Sidhu signed it. It aims to cut tariffs, reduce red tape and improve market access, and it addresses non-tariff barriers to make trade and investment more predictable.

Sectors named include industrial, agricultural, forest, fish and seafood, environmental and engineering. The prime minister's office cited pulses, canola, industrial machinery, power generation equipment and aerospace.

The strategic partnership

It was the first visit to Canada by an Abu Dhabi Crown Prince. The leaders launched a long-term framework covering economic ties, energy, technology, education, defence, diplomacy and cultural exchange.

A memorandum of understanding modernises the defence cooperation arrangement, covering military training, joint exercises, defence industrial cooperation and cyber security, and it creates a Joint Military Committee. A new Energy Cooperation Arrangement between Masdar and Natural Resources Canada sets a framework for cooperation in energy. Global Affairs Canada and the Anwar Gargash Diplomatic Academy signed a memorandum on diplomatic training and education.

The visit advanced the UAE's investment commitment to Canada of $70 billion, which was announced in November 2025. One report says that the UAE committed up to $50 billion last year, so the figure differs by source, and it is a pledge and not money that has been spent. Agreements signed include a memorandum between DP World, the Arctic Gateway Group and CentrePort Canada for a transportation corridor linking the Port of Churchill, the Hudson Bay Railway and CentrePort Canada, and one between Invest in Canada and the Abu Dhabi Chamber of Commerce and Industry. Another report says that Emirati companies are negotiating possible deals worth up to C$21.1 billion.

Both countries will start negotiations on an extradition treaty and a mutual legal assistance treaty. One report notes that the extradition plan is drawing criticism over the UAE's human rights record.

Measure	Figure
Two-way merchandise trade, 2025	C$3.5 billion
Canadian exports to the UAE	C$2.8 billion
Canadian imports from the UAE	C$679.1 million
Growth in Canadian exports in 2025	more than 10%
Canadian companies with an operational presence in the UAE	more than 150
Canadians living and working in the UAE (estimate)	60,000

Minister Sidhu projects that two-way trade will double to about C$7 billion over the next decade.

Carney has pledged to double Canada's non-US trade over the next decade, because US tariffs have affected the Canadian economy. Talks with Washington collapsed in August. The UAE is the largest Middle East market for Canadian exports and a major buyer of Canadian motor vehicles, parts and machinery. The agreement came days before Carney said in Montréal that Canada aims to become an associate member of the European Union by June 2027.