The signing of the agreement is scheduled for Tuesday in the Romanian capital Bucharest.
Terzic said on Sunday Bosnia-Herzegovina would not sign the agreement because Croatia would not allow it to keep customs duties on certain agricultural products so that it could protect its poor production.
The Presidency said in a statement that Terzic had informed Bosnia-Herzegovina's leadership that the conditions for its accession to the CEFTA had been met.
It was not specified whether any concessions had been made and if so, which ones. The statement just said that the Presidency had authorised Terzic to sign the CEFTA and that after that the domestic authorities would carry out the necessary procedures.
Also on Monday, Croatian Prime Minister Ivo Sanader dismissed Terzic's allegations that Croatia was blackmailing Bosnia-Herzegovina and that it wanted to keep its neighbour out of the CEFTA. He recalled that Croatia had free trade agreements with both Serbia and Bosnia-Herzegovina and that they should be respected.
The agreement between Croatia and Bosnia-Herzegovina, which was signed by the previous government, should be respected. We wanted to have all the provisions of the agreement with Bosnia-Herzegovina transferred to the CEFTA. That was not blackmail. We insisted on the existing agreements, Sanader said in an interview with Croatian Radio.
Sanader welcomed the fact that Serbia had recognised this and initialled the agreement on accession to the CEFTA.