The agreement was signed by Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Macedonia, Moldova, Montenegro, Romania, Serbia and the UN Civil Administrator in Kosovo on behalf of Kosovo.
Croatia's Minister of the Economy, Labour and Entrepreneurship Branko Vukelic signed the agreement on Croatia's behalf. Croatia's delegation at the event consisted also of Foreign Minister Kolinda Grabar Kitarovic and Deputy Prime Minister Damir Polancec at the helm of the delegation.
"We are satisfied and this is a great victory of Croatian diplomacy," Polancec told reporters after the signing ceremony.
"All who have signed the CEFTA are winners in this story," Polancec added, dismissing speculation that Croatia had made concessions.
"No concessions were made," he said.
The signing of the agreement was preceded by announcements of boycott from Bosnia-Herzegovina, which sought protection for its agricultural products, and from Serbia, which refused to reduce excise taxes on tobacco imports.
"From the first moment on, Croatia firmly stood by its position that what was defined by bilateral agreements should be integrated into this multilateral agreement," Polancec said.
"That is what was done," he added.
The agreement on the expansion of the CEFTA replaces a network of 31 bilateral free trade agreements signed by Southeast European countries to liberalise more than 90 percent of trade and almost all trade in industrial products.
The agreement unifies and upgrades regional trade rules and incorporates modern trade regulations on market competition, public procurement and the protection of intellectual property. It will ensure the convergence of relevant trade regulations, notably with regard to industrial, sanitary and phytosanitary regulations.
The result is a single simplified system of regulations that will facilitate trade in the region.
The CEFTA will make the region, which is becoming a consolidated market for foreign investments, more interesting. Generally, the inflow of foreign capital in the region is still weak. It is not sufficient for the financing of the current account deficits of the countries in the region, and they have to attract more foreign direct investments.
The CEFTA will also help non-WTO countries to prepare for WTO membership considering the fact that both processes are based on the same goals and rules of progressive liberalisation and open trade.
The European Union welcomes the signing of the new CEFTA, the European Commission (EC) Delegation to Croatia said in a statement.
The EU is not a party to the CEFTA, but the EC has continually provided political, technical and financial assistance through all stages of the process of trade liberalisation in Southeast Europe, the statement said.
EU Trade Commissioner Peter Mandelson said that the expanded CEFTA would offer real economic benefits to all sides, and that it was an important political signal since closer trade relations in the region were a basis of stability and growing prosperity.
EU Enlargement Commissioner Olli Rehn said that the new agreement complemented the Stabilisation and Association Agreements the EC had negotiated or was negotiating with Western Balkan countries.
The agreement is an important contribution to constructive economic cooperation in the region as a precondition for EU membership, Rehn said.