Canada-UAE Trade Deal Signed, Cutting Tariffs on 99% of Exports

A fast deal made for a slow-moving trade war

Canada and the United Arab Emirates have signed a Comprehensive Economic Partnership Agreement (CEPA). It is the clearest sign yet that Ottawa is building trade relationships that do not depend on Washington. International Trade Minister Maninder Sidhu and UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi signed the deal in Ottawa on October 27. Prime Minister Mark Carney and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan oversaw the ceremony.58 It was the first time a Crown Prince of Abu Dhabi had visited Canada.1

The speed of the deal stands out more than its size. Negotiations took 47 days, which both governments call the fastest either country has ever concluded a free trade agreement.116 The two sides announced their intention to negotiate in November 2025 and finished talks in July 2026 after about three rounds over two months.10 The agreement still has to pass Canada's Parliament. A Canadian government source said the signing was the last step before ratification, and both sides expect the deal to take effect in 2027.414

The coverage broadly agrees on why this is happening now. Carney has promised to double Canada's trade with countries other than the United States over the next ten years, because President Donald Trump's tariffs have hit the Canadian economy. Later efforts to reach a deal with Washington have failed, so Ottawa has gone after agreements in Asia-Pacific, Europe and the Middle East.248

What the tariff numbers actually say

Nearly every report leads with the same figure: once the agreement is fully in place, it will cut or remove tariffs on more than 99 percent of what Canada currently exports to the UAE.236 That figure is accurate but describes the end point, not the first day. On entry into force, the UAE is expected to give preferential access on 93.4 percent of tariff lines, covering 93.6 percent of current Canadian exports. Only after phase-ins are complete will duties disappear on more than 97 percent of tariff lines.10 Some of those reductions will take three to five years.10 One media-comparison tracker noted that Al-Monitor focused on this tariff-line detail while most outlets reported only the 99 percent headline.12

The difference matters for exporters planning around 2027. Farm goods fare especially well. Preferential treatment covers 98.7 percent of current Canadian agricultural exports to the UAE, and tariffs on lentils, peas, chickpeas, canola seed, potatoes, French fries and beef are set to end when the deal takes effect.10 Ottawa also says it gave no new market access for its supply-managed farm sectors, which are politically sensitive. That is a familiar red line in Canadian trade talks, and it appears to have held here too.10

On the industrial side, tariffs end on 92 percent of Canadian industrial exports, including all aerospace goods, gas turbines and some light vehicles.10 That matters because the UAE already buys a lot of Canadian vehicles, auto parts and machinery.211 The agreement also goes beyond tariffs. It covers import licensing, technical barriers to trade, sanitary rules, services, temporary entry for business travellers, and digital trade, including a ban on customs duties on electronic transmissions.10 Rules on government procurement were left for later: the two sides agreed to start negotiating a fuller chapter within a year of the deal taking effect.10

Modest trade, bigger money

The bilateral trade involved is small. Two-way trade was worth about C$3.5 billion last year and has grown roughly 10 percent a year recently.213 Sidhu says the CEPA will lift that from C$3.4 billion to C$7 billion over the next decade. He also describes the UAE as a gateway to a Middle East and North Africa market of nearly 500 million people.15

The numbers vary across reports, and the differences come down to currency. Ottawa's figures are in Canadian dollars. Middle East Eye converted them to US dollars, describing growth from about $2.4 billion to nearly $5 billion and a UAE economy of around $500 billion, compared with the $700 billion Sidhu cited.171 The investment pledge has the same issue. Some outlets report it as up to US$50 billion and others as C$70 billion, but these are the same commitment.1016 At least one outlet called it $70 billion in US dollars, which looks like a conversion mistake.7

That pledge is arguably the real point of the visit. Carney said the visit had turned the commitment into actual investments in energy, infrastructure and technology.1 Announced projects include a DP World memorandum to build a transport corridor linking the Port of Churchill, the Hudson Bay Railway and CentrePort Canada, and an energy cooperation arrangement between Masdar and Natural Resources Canada.1 Emirati companies also said they were negotiating trade and investment deals with Canadian partners worth up to C$21.1 billion, in areas including mining, logistics and energy.6 Sidhu has said the overall investment could support more than 100,000 Canadian jobs.5 An investment protection agreement signed during Carney's trip to Abu Dhabi took effect on May 19, 2026.10

The partnership goes beyond trade. The two countries signed a defence cooperation memorandum that sets up a Joint Military Committee. They also agreed on diplomatic training and will open talks on extradition and mutual legal assistance treaties.5616

The U.S. backdrop

The deal's political weight comes from the dispute with Washington. One account says the United States put a 50 percent tariff on about C$27.6 billion of Canadian goods under Section 338, and Canada answered with counter-tariffs on the same value of U.S. imports.10 Reuters reportedly said on October 26 that the two governments were discussing possible relief on steel and auto tariffs. A Canadian official said the next day that recent talks had made only limited progress.10

This is the core tension in Canada's strategy. More than $2.5 billion in goods and services crosses the Canada-U.S. border every day, according to Middle East Eye.17 Even if Canada-UAE trade doubles, it will still be a tiny fraction of that.10 Analysts quoted by BigGo Finance see diversification as a way to reduce risk over the medium term, but noted that because the deal starts in 2027, its effects will not appear in trade data until the year after next at the earliest.9

Where the coverage diverges

Most reporting repeats the official framing: record speed, broad tariff cuts, strategic diversification.31315 Critics see it differently. Stuart Trew of the Canadian Centre for Policy Alternatives told Middle East Eye that Canada appeared willing to agree to almost anything to secure Emirati money. He questioned the extradition talks and defence cooperation with a country accused of backing Sudan's Rapid Support Forces, a claim the UAE denies.17 Trew also argued that nothing can really replace a working U.S. relationship for industries like autos, which Canada exports to very few other markets.17 Conservative trade critic Stephanie Kusie dismissed the visit as another showy meeting with no concrete results for Canadians.12

The timing also shows the limits of Canada's push. Canada closed the UAE deal just before a summit with the European Union in Montreal, and EU member states were split over whether to call Canada an "associate member" in the joint statement. Germany and at least three other countries objected.18

The verdict

My reading: the Canada-UAE CEPA is a real agreement, but it matters more as a signal and as a way to attract capital than as a source of trade volume. The tariff terms are generous and the speed of the talks is impressive. Still, the main prize is Gulf investment in ports, energy and Arctic logistics, not pulses and turbines. Carney's approach is to add up many smaller markets and investment sources. That can make Canada more resilient over time, but it cannot replace the U.S. relationship. The deal shows Ottawa can move quickly when Washington won't. Whether the extra volume justifies the political costs critics point to will depend on whether the Emirati money arrives, and that won't be clear until well after 2027.