At the Fourth ASEAN Summit in Singapore in January 1992, ASEAN initiated the ASEAN Free Trade Area, or AFTA, which laid out a comprehensive program of regional tariff reduction, to be carried out in phases through the year 2008. This deadline was subsequently moved forward to 2003. Over the course of the next several years, the program of tariff reductions was broadened and accelerated, and a host of "AFTA Plus" activities were initiated, including efforts to eliminate non-tariff barriers and quantitative restrictions, and harmonize customs nomenclature, valuation, and procedures, and develop common product certification standards. In addition, ASEAN later signed framework agreements for the intra-regional liberalization of trade in services, and for regional IPR cooperation. An industrial complementation scheme designed to encourage intra-regional investment was approved, and discussions were held on creating a free investment area within the region. During the financial crisis of 1997-98, ASEAN reaffirmed its commitment to AFTA, and as part of a series of "bold measures," agreed that the original six AFTA signatories would accelerate many planned tariff cuts by one year, to 2002 from 2003.

When the AFTA agreement was originally signed, ASEAN had six members (Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand). Vietnam joined in 1995, Laos and Myanmar in 1997, and Cambodia in 1999. All four countries were required to sign on to the AFTA agreement in order to join ASEAN, but were given longer time frames in which to meet AFTA's tariff reduction obligations.

The US-ASEAN Business Council℠ has long supported the ASEAN Free Trade Area and other initiatives to promote regional economic integration. The Council and its member companies have pointed out that with ten integrated markets with a population exceeding half a billion people, ASEAN will be much more attractive to large-scale direct investment than it would as a collection of relatively small, segmented markets.