Developmental states under the WTO: the shipbuilding industry in Korea

Is the era of the developmental state and a strategic approach to industrial governance in North East Asia really over? What industrial policies are being pursued under the rules of the World Trade Organisation (WTO) and for what purposes? This paper seeks to unravel the puzzle of how developmental ambitions in the North East Asian states can exist under the WTO. Through recent empirical evidence in the Korean shipbuilding industry, I argue that a strategic approach to industrial policy continues and that WTO rules do not have a policy crushing effect, but has instead ‘disciplined’ the use of industrial policies. While the Korean shipbuilding industry has come a long way since its birth in the 1970s, the most pressing challenge today is to achieve further localisation of core technology-intensive parts and materials. This is a more accurate assessment of changes in Korea and more consistent with its historical developmental trajectory than misleading notions that conclude that Korea is becoming a ‘liberal-regulatory’ state. Core features of the developmental state such as administrative guidance continues to play an important role in industrial governance.