It has by now been widely recognized that the formation of international production/distribution networks in East Asia is an extremely important phenomenon (Athukorala and Hill, Chapter 2 of this volume). Rapid development of production networks since the 1990s undermines or at least partially nullifies the applicability of a wide range of old theories and thought. In the context of international trade theory, the pattern of industrial location and international trade in East Asia no longer follows a typical North-South division of labor explained by traditional comparative advantage theories such as the Ricardian and Heckscher-Ohlin models.