Presidents Evo Morales of Bolivia, Hugo Chavez of Venezuela, and Fidel Castro of Cuba signed the pact in Havana on Saturday to streamline commercial ties among the three governments.
They are all opposed to US trade policies that they say overwhelmingly favour the United States.
Castro described the accord as "an extraordinary document with profound humanitarian, social and economic content".
"Now, for the first time, there are three of us," Castro said.
"I believe that, one day, all [Latin American] countries can be here."
Morales said upon arrival in Cuba on Friday: "It will be a great meeting of three generations of revolutionaries, of people representing the three revolutions that we still have to broaden."
The Bolivian leader expressed confidence that the treaty would help promote "fair trade, trade that generates jobs, ensures living standards and defends human dignity".
The initiative promoted by Castro and Chavez is an attempt to thwart US plans for the Free Trade Area of the Americas (FTAA).
The three presidents call the FTAA a US effort to annex Latin America. Since the hemispheric trade pact stalled last year, Washington has signed nine free trade agreements with Latin American countries.
The mini-summit of leftist leaders has been eyed with some concern in the region, as members of the Andean Community that includes Bolivia, Colombia, Ecuador and Peru fear their grouping could be dealt another blow if Bolivia decides to follow Venezuela's lead and pull out.
Venezuela officially pulled out of the Andean Community this past week in protest over its members signing bilateral free trade agreements with the US that Caracas insists threaten the commercial interests of Latin American countries.
Luis Arce, the Bolivian finance minister, has already warned that Bolivia will follow Venezuela's lead if Ecuador, Colombia and Peru continue to develop their free trade ties with the US.