Fragmented trade and manufacturing services-Examples for a non-convex general equilibrium

In a class of examples where the technology is Ricardian for fabrication and Leontief for assembly, with fixed costs for 'service links', it is proved that there always exists Pareto optimal allocations, supported by a concept of generalized equilibrium (but-as shown by Koopmans-not by the Walras equilibrium, where the firms with increasing returns operate as price takers). Implications on specialization and cross country income distribution are noted.