Trade Deal to Double Commerce With UAE to $5 Billion

Prime Minister Mark Carney and the United Arab Emirates signed a comprehensive free trade agreement on Tuesday. The deal, known as the Canada-UAE Comprehensive Economic Partnership Agreement, aims to double two-way trade from $2.4 billion to nearly $5 billion over the next decade. The announcement followed a two-day visit to Ottawa by Emirati Crown Prince Khaled bin Mohamed bin Zayed Al Nahyan.

Carney stated that the agreement will reduce or eliminate tariffs on more than 99 percent of Canadian exports to the UAE starting next year. He identified specific benefits for sectors including pulses and canola farming, industrial machinery manufacturing, and aerospace. Minister of International Trade Maninder Sidhu added on Wednesday that the pact gives Canadian firms greater access to the UAE’s $500 billion economy.

The negotiation process for the trade pact took 47 days, a record for both nations. Alongside the trade agreement, the two governments signed a memorandum of understanding to establish a Joint Military Committee. This body will oversee military education, training, joint exercises, cybersecurity, and information exchanges. Ottawa also opened negotiations on an extradition treaty that would allow Abu Dhabi to request the handover of individuals accused of crimes.

Critics question the strategic value of the deal. Stuart Trew, director of the Trade and Investment Research Project at the Canadian Centre for Policy Alternatives, described the UAE as a paranoid surveillance state. He expressed concern about an extradition treaty with such a nation and a defense deal with a country he accused of fomenting war in Africa. Trew argued that Canada appears willing to agree to almost anything to secure pledged investment.

The UAE previously pledged $50 billion in investment for Canadian energy and development projects, particularly in the Arctic, after Carney visited Abu Dhabi a year ago. Carney said this week’s talks delivered significant progress on that pledge but did not provide further details. Trew noted that the Emiratis are dangling these funds in front of Ottawa.

The new pact is part of Carney’s effort to diversify Canada’s partnerships as relations with Washington have deteriorated. He declared the old 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.

Trew called the diversification approach a confusing strategy. He argued that the government has identified the wrong crisis and exaggerated its need for foreign funding. Trew noted that automobiles are Canada’s second-biggest goods export after energy, meaning few alternatives exist for major trade volumes.