Prime Minister Mark Carney is preparing to formalize an investment agreement with the United Arab Emirates (UAE) during his upcoming visit this week. A senior government official disclosed that a foreign investment promotion and protection agreement (FIPA) is on the agenda, laying the groundwork for mutual economic investment.
Objective of the UAE Visit
This visit aims to enhance the economic ties between Canada and the UAE, particularly in key sectors such as energy, agriculture, infrastructure, and artificial intelligence (AI). Carney’s meeting with UAE President Sheikh Mohamed bin Zayed Al Nahyan is expected to further these discussions. The trip is strategically scheduled before the G20 leaders’ summit in Johannesburg, South Africa.
Significance of FIPAs
- A FIPA provides a structured framework for investment between two countries.
- It includes rules and a dispute settlement process to create a predictable investment climate.
- Experts suggest that FIPAs can be stepping stones toward broader free trade agreements.
Economic Context
The UAE is recognized as one of the largest investors globally, utilizing its sovereign wealth funds to support various international projects. With Canadian merchandise trade with the UAE valued at approximately $2.6 billion in exports in 2024, the potential for substantial collaborative projects in Canada is significant.
Trade Relations and Investment Strategies
Carney is actively pursuing billions of dollars in foreign direct investment. This initiative comes in light of recent strains in Canada’s trading relationship with the United States, particularly following the implementation of tariffs by former President Donald Trump. By improving relations with the UAE, the Canadian administration seeks to diversify its trade partnerships.
Human Rights Concerns
International human rights experts have raised concerns regarding the UAE’s involvement in global conflicts, particularly its support for paramilitary forces accused of committing atrocities in Sudan. Critics urge the Canadian government to consider conditions related to human rights when establishing this investment agreement.
The Importance of Pragmatism
According to a senior government official, Canada lacks the option to exclusively engage with nations that share its values. The changing global landscape calls for practical approaches in foreign relations. While encouragement for ethical trade practices remains, experts suggest that engagement with various countries can still lead to positive influence and exchange of values.
Future Expectations
As part of this diplomatic effort, Carney will need to demonstrate tangible outcomes from his investments and discussions with influential global leaders. This performance will be essential for building trust and ensuring a productive economic relationship with the UAE and other nations.
