The paper analyses the evolving trends in trading patterns among the ASEAN+3 economies during the past decade in order to explain why it is the time for nstitutionalization of regional trade relations and how to meet those expectations. The author considers that though the ASEAN+3 trade relationship is reaching a critical point of interdependence, given its high intra-regional and intra-industry trade ratios, the 'final demand' is still outside the East Asian region. Thus, forming a regionwide FTA is the most relevant policy approach; that is, shifting the regional economic integration process from a market-driven to an institution-oriented one. East Asian trading nations should be more reliant on themselves and less reliant on outsiders to make the East Asian region better positioned in the global trading system. To this end, the FTAs in the region must act as effective means to generate for East Asia endogenous demand, turning China, Japan, Korea, and ASEAN, to some extent, into the final markets for the regional economies. (The rest is omitted.)

Executive Summary

I. Observations on the evolving trend in ASEAN+3 Trade Relations:
1. Observation 1: East Asia's trade grows fast and driving world trade
2. Observation 2: The North-South pattern in trade relations between the ASEAN-10 and the ASEAN+3 has been the key facilitator of the ASEAN+3's intra-regional trade during the last two decades
3. Observation 3: The shifting roles of key drivers in East Asia's trade are happening
4. Observation 4: Intra-industry trade is rising with the highest proportion of intermediate products

II. Logics behind deeper Institutionalization of ASEAN+3 Economic Relations and Implications for East Asian Economic Integration
1. Logics behind deeper Institutionalization of ASEAN+3 Economic Relations
2. Implications for East Asian Economic Integration

III. Some concluding remarks

References