Free Trade Agreements (FTAs) as a powerful trade policy instrument increasingly play an important role in Asian economic growth. Asian countries have sought to deepen their economic integration to achieve sustainable economic development by applying FTAs ever since the Asian Financial Crisis in 1997. The emerging trilateral FTA negotiation between China, Japan and South Korea (CJK) provides new evidence of ongoing Asian economic integration. In this paper, by analyzing recent FTA developments in Asia as well as prospects and challenges of the FTA-CJK negotiation, we find that the FTA-CJK will expand the intra-regional trade volume and stimulate economic growth in all three counties. However, given the tremendous differences in economic structure and development stage between the three countries as well as political economy considerations, the establishment of the FTA-CJK will not be a smooth process. Pragmatic and practical strategies during the FTA-CJK negotiation are needed to create a win-win-win situation.

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