The United Arab Emirates and Canada have taken significant steps to enhance their bilateral relationship through the signing of major trade, investment, and defense agreements. This development occurred during the visit of Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan to Ottawa, where both nations inked a Comprehensive Economic Partnership Agreement (CEPA), an updated defense cooperation agreement, and a memorandum on diplomatic training. Additionally, they agreed to commence negotiations on extradition and mutual legal assistance treaties.
The CEPA, which was negotiated over a swift 47-day period, is expected to substantially bolster economic ties by eliminating or reducing tariffs on over 99 percent of Canada’s current exports to the UAE. This agreement will also address various trade barriers and expand access to services, including engineering and environmental industries. Canada anticipates that this agreement will double bilateral trade over the next decade as part of its strategy to diversify its international economic partnerships beyond the US market.
The UAE currently stands as Canada’s largest export market in the Middle East. With over 150 Canadian companies operating in the Emirates, the UAE has committed to investing up to $50 billion in Canada, targeting sectors such as energy, artificial intelligence, critical minerals, and infrastructure. The partnership builds on existing investments by Emirati companies in Canada, particularly in the chemicals and logistics industries.
For the UAE, strengthening relations with Canada aligns with its broader strategy of expanding international trade networks and diversifying supply chains. Canada offers considerable natural resources, agricultural production, advanced engineering capabilities, and access to major international markets. Both countries have identified sectors with strong potential for future cooperation, including critical minerals, food security, artificial intelligence, and infrastructure.
In the realm of critical minerals, the partnership could merge Canada’s natural resources with Emirati investment in processing and industrial development. In agriculture, Canadian grains, pulses, and seafood could bolster the UAE’s food security. Furthermore, opportunities in artificial intelligence, research, and data center development are being explored, leveraging Canada’s research expertise and energy resources alongside the UAE’s growing technology sector.
Despite the promising agreements, further implementation is necessary. Canada’s Parliament must ratify the trade agreement, while investment commitments will need to translate into tangible projects. This strengthened partnership underscores a shared interest in economic diversification, reliable supply chains, and international cooperation amidst global trade uncertainties.