The world economy at present has been affected by a world-wide growing price of raw-materials, increasing labor costs and trade barriers which occur frequently. China, Japan and South Korea are geographical neighbor that make close economic contacts. The three countries reached an agreement to set up a FTA to further advance their economic development. The textile and clothing industry as an important sector of our economy has caused the concern of many who are involved in this industry with issues regarding how it competes and cooperates with its partners in the FTA. This paper discusses the competition and cooperation of the textile industry after the establishment of the FTA and hopes to shed some light on the development of China's textile and clothing industry.