Trade Policies for the Low-carbon Transition Need to Take Into Account Least Developed Country Structural Features

Increasing the share of manufactured goods in total exports would be beneficial to least developed countries (LDCs), but achieving industrial growth remains elusive. This goal can be jeopardized by the increasing use of trade policy measures to achieve climate or environmental goals. While these goals are legitimate, uncoordinated measures by systemically important traders can have adverse consequences for LDCs. To attenuate them, these traders should adopt special measures to help LDCs adapt to the evolving international regulatory scene. LDCs should invest more on upgrading their productive capacities and intensify trade with regional markets.