The problem isn't one of not understanding comparative advantage. The relevant industry often is physical located within the country, likely due to cheap labor

The problem isn't one of not understanding comparative advantage. The relevant industry often is physical located within the country, likely due to cheap labor costs. The challenge is that this industry is likely has foreign ownership. The prevents the reinvestment of capital in moving up the value ladder. The strategies to cope with sometimes involve domestic protectionism (bad idea, for the reasons you outline); China's % foreign-ownership partnership idea (which probably doesn't scale down to smaller markets; and doubling down further in zones with economic growth, to encourage even more investment (both foreign and local).