The commercial spat-turned diplomatic row has set back relations between the two countries 10 years, Defense Minister Peter MacKay also said, according to Astral Radio parliamentary bureau chief Daniel Proussalidis, who blogged about the private conversation he said he witnessed on Newstalk 1010's website.

Canada was forced last month to close its Camp Mirage military base in Dubai after refusing to grant the UAE's two national carriers, Emirates Airlines and Etihad Airways, more landing rights.

The base was part of a key supply route to Afghanistan.

The stand-off grew even more personal after the UAE forced a plane carrying MacKay back from Afghanistan to take a long detour by denying the aircraft permission to use its airspace.

According to Proussalidis, MacKay approached Canada's finance minister and a senator mingling with reporters outside parliament after a fire alarm on Wednesday.

"It was all small talk until Defense Minister Peter MacKay walked up and joined the conversation wearing a red 'Fly Emirates' baseball cap on his head and a grin on his face," Proussalidis wrote.

"MacKay joked that he wore the cap for (former Transport Minister John) Baird."

Baird had reportedly lobbied against granting UAE carriers extra landing rights in Canada.

"Canada could have continued to use a military base in the UAE for free... if only it had granted those slots," MacKay told Conservative Senator Michael Meighen, before suggesting it would take 10 years to repair the relationship with the UAE, according to Proussalidis.

The minister's spokesman was not immediately available to comment.

But MacKay told public broadcaster CBC: "My view is that we obviously have some work to do in repairing the relationship with the United Arab Emirates."

About 27,000 Canadians live in the United Arab Emirates, one of Canada's biggest economic partners in the Middle East, with bilateral trade valued at about 1.5 billion dollars per year, according to UAE officials.

earlier related report
S.Korea may send envoy to win defence contract in Brazil
Seoul (AFP) Nov 18, 2010 - South Korea may send a special envoy to help a domestic shipbuilder secure a major Brazilian contract for warships, officials said Thursday.

Daewoo Shipbuilding and Marine Engineering said it had submitted a preliminary proposal to Brazil, which plans to buy 11 warships in the form of a government-to-government project.

"We are in talks with government officials about the contract in Brazil," a Daewoo spokesman told AFP.

The South's defence ministry said it would consider sending a special envoy to Brazil.

The project is expected to be firmed up after president-elect Dilma Rousseff takes office in early January, the Daewoo spokesman said, adding his company expects competition from Italy, France or other European countries.

The contract, which reportedly is worth as much as four trillion won (3.5 billion dollars), includes destroyers.

South Korea has built its own destroyers and in 2007 launched its first Aegis destroyer equipped with advanced air and sea weaponry.

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