CDP Policy Review No. 5

By Keith Nurse

The paper reviews the provisions within the WTO multilateral trade regime which impact on the policy space for LDCs which are interested in pursuing industrial policies as latecomers. It finds that LDCs are more constrained by lack of capacity rather than by WTO provisions, in contrast to more advanced developing countries.

The paper first provides a brief overview of the LDCs economies and export structures. Then it explores the debates and perspectives on industrial policy taking into account the requirements of multilateral trade policy. The next section looks specifically at the provisions within the WTO regime and assesses the scope for policy space for industrial policies by LDCs including an assessment of the recently concluded Nairobi package. The final section provides some examples of how LDCs could implement industrial policies drawing on the experience of developing countries that have achieved some level of success.