Ottawa Cuts Tariffs on 99% of Exports in New UAE Deal

Prime Minister Mark Carney has expanded Canada's trade network to include the United Arab Emirates, signing a comprehensive economic partnership that reduces or eliminates tariffs on more than 99 percent of Canadian exports. The agreement, known as the Canada-UAE Comprehensive Economic Partnership Agreement, was negotiated in a record 47 days and takes effect next year.

Maninder Sidhu, the minister of international trade, stated that the deal is projected to increase two-way trade from $2.4 billion to nearly $5 billion over the next ten years. The pact opens new markets for Canadian producers of pulses and canola, manufacturers of industrial machinery and power generation equipment, and the aerospace sector. Sidhu noted that this provides greater access to the UAE economy, which is valued at $500 billion.

The commercial agreement was signed alongside a memorandum of understanding that establishes a Joint Military Committee. This body will oversee military education, joint exercises, and cybersecurity information exchanges. The two governments also began negotiations on an extradition treaty that would allow Abu Dhabi to request the handover of individuals accused of crimes.

These agreements followed a two-day visit to Ottawa by Khaled bin Mohamed bin Zayed Al Nahyan, the Emirati crown prince. It was the first time an Emirati crown prince has visited the Canadian capital. Carney said the talks delivered progress on a $50 billion investment pledge made by the UAE a year ago for Canadian energy and development projects, particularly in the Arctic. He did not provide specific details on the progress.

Stuart Trew, director of the Trade and Investment Research Project at the Canadian Centre for Policy Alternatives, criticized the speed and scope of the deals. He told Middle East Eye that the Emiratis are essentially dangling the investment funds in front of Ottawa. Trew argued that Canada is willing to agree to almost anything to secure the money. He questioned the extradition treaty with what he described as a paranoid surveillance state and the defense cooperation with a country he accused of fomenting war in Africa. Rights groups have reported evidence that the UAE finances the Rapid Support Forces in Sudan, a group accused of genocide. The UAE denies any involvement.

The move fits Carney's strategy to diversify partnerships after declaring the Canada-US relationship over in May 2025. US tariffs introduced in March 2025 hit most Canadian goods at 25 percent and energy at 10 percent. Carney stated that Canada now has preferential access to 1.5 billion consumers across 16 free trade agreements and 51 countries. Recent diplomatic efforts include a visit to China, where Beijing agreed to lower tariffs on Canadian canola oil to 15 percent while Canada accepts 49,000 Chinese electric vehicles. Carney also visited Saudi Arabia in July, securing 13 commercial agreements worth $700 million, and Turkey last week, where free trade talks began.

Trew called the government's approach a confusing strategy and argued that it has identified the wrong crisis. He stated that the government has exaggerated its need for foreign funding and noted that automobiles remain Canada's second biggest goods export after energy. He maintained that nothing can fully replace the trade relationship with the United States.