If pdb.set_trace() is the last statement in the first code snippet, variable 'err' is (wrongly?) excluded from locals(). Adding any code after the pdb.set_trace() statement makes 'err' available in locals.

In [2]: try:
   ...:     raise ValueError("I am ValueError")
   ...: except ValueError as err:
   ...:     print("err" in locals())
   ...:     import pdb; pdb.set_trace()
   ...:
True
--Return--
> <ipython-input-2-9d1238ac9b7a>(5)<module>()->None
-> import pdb; pdb.set_trace()
(Pdb) print("err" in locals())
False          <-------------- BUG??
(Pdb) c

In [3]: try:
   ...:     raise ValueError("I am ValueError")
   ...: except ValueError as err:
   ...:     print("err" in locals())
   ...:     import pdb; pdb.set_trace()
   ...:     import os # Dummy code - makes variable 'err' available inside the debugger.
   ...:
True
> <ipython-input-3-3cefa7fe6ddd>(6)<module>()->None
-> import os # Dummy code - makes variable err available inside debugger
(Pdb) print("err" in locals())
True

In [4]: sys.version_info
Out[4]: sys.version_info(major=3, minor=7, micro=3, releaselevel='final', serial=0)

FTR, the variable 'err' is available in both cases in case of Python 2.7. Also, this happens with ipdb as well.

Please note that I am aware that I need to assign the variable 'err' to some variable inside the except block to access it outside the except block. However, the pdb statement is still inside the except block in both cases.