The United Arab Emirates (UAE) and Canada have taken significant steps to enhance their bilateral relationship with new trade and defense agreements. During a landmark visit by Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan to Ottawa, the two nations signed a Comprehensive Economic Partnership Agreement (CEPA), an updated defense cooperation agreement, and a memorandum on diplomatic training. These agreements aim to strengthen their strategic ties and expand economic cooperation.
The CEPA, which was negotiated in just 47 days and concluded in July 2026, is set to eliminate or reduce tariffs on over 99% of Canada’s current exports to the UAE. It also aims to address trade barriers and improve service access in sectors like engineering and environmental industries. Canada anticipates that this agreement will help double its bilateral trade with the UAE over the next decade, as it seeks to diversify its international economic partnerships and lessen its reliance on the US market.
As Canada’s largest export market in the Middle East, the UAE is already home to more than 150 Canadian companies. The UAE has committed up to $50 billion in investments in Canada, focusing on energy, artificial intelligence, critical minerals, and infrastructure sectors. This partnership builds on existing Emirati investments in Canada’s chemicals and logistics industries.
For the UAE, enhancing relations with Canada aligns with its strategy to expand international trade networks and diversify supply chains. The UAE benefits from Canada’s rich natural resources, agricultural production, advanced engineering capabilities, and access to major international markets. Both nations have identified sectors like critical minerals, food security, artificial intelligence, and infrastructure as potential areas for future cooperation.
In particular, collaboration on critical minerals could merge Canada’s rich resources with Emirati investment in processing and industrial development. Canada’s agricultural products, including grains, pulses, and seafood, could further bolster the UAE’s food security. Additionally, both countries are exploring opportunities in artificial intelligence, research, and data center development, leveraging Canada’s research expertise and energy resources alongside the UAE’s burgeoning technology sector.
While these agreements mark a significant milestone, further steps are required for full implementation. Canada’s Parliament must ratify the trade agreement, and the investment commitments will need to materialize into tangible projects. The strengthened partnership signifies a mutual interest in economic diversification, reliable supply chains, and international cooperation amid global trade uncertainties.