Japanese Foreign Minister, Toshimitsu Motegi and Britain’s International Trade Secretary, Liz Truss signed the agreement in Tokyo.

It paves the way for the agreement to begin on Jan. 1, after Britain ceases to be bound by EU trade rules.

The deal is still subject to scrutiny by the parliaments of both countries.

The UK-Japan Comprehensive Economic Partnership Agreement (CEPA) was agreed in principle last month and hailed by Britain as its first major trade deal since it formally left the European Union.

The agreement is expected to boost British trade with Japan by an estimated 15.2 billion pounds (19.5 billion dollars), the British government said last month.

The agreement largely corresponds to the existing free trade agreement between Japan and the EU.

Britain formally left the EU on Jan. 31, and entered a transition period until the end of the year, during which it still belongs to the EU single market and customs union.

While Japanese companies welcome the agreement, they are also concerned over whether London will really be able to reach an agreement with the EU for the period after the end of the transition period.

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Johnson is expected to indicate whether he plans to press on with negotiations on future relations or make good on a previous threat to walk away from talks and instead focus on preparing for a no-deal scenario, in spite the economic consequences.

An early morning statement from a close Johnson ally, Foreign Minister Dominic Raab, suggested the prime minister was unlikely to call time just yet.

Only two issues are obstructing a deal, Raab said: access to fisheries and so-called “level playing field” guarantees demanded by the EU on future British standards.

“We are close,’’ he said.

Eight months after Britain formally left the EU, progress towards a deal remains elusive.

With Britain due to exit a post-Brexit transition period at the end of the year, talks have been frustrated by disagreement on fisheries, assurances on environmental and social standards, and governance of potential disputes.

Both sides expressed disappointment in the results of talks in the last few days, but all signs pointed to the prolongation of negotiations past a Thursday deadline touted by London in September as the last realistic chance to clinch a deal.

However, a statement from EU leaders inked at a Brussels summit on Thursday evening that called on Britain to “make the necessary moves to make an agreement possible” drew the ire of London’s chief negotiator David Frost.

“Surprised by suggestion that to get an agreement all future moves must come from the UK. It’s an unusual approach to negotiations,” he wrote on Twitter hours later.

Johnson is to make a statement on Friday and has indicated that the threat to walk away still stands.

Brussels fears London will undercut it in business by loosening often-costly rules on environmental protection or labour rights – commonly known as “dumping.”

London refutes this, and insists it has not left the EU only to be bound by its regulatory regime.

The EU also wants a trade deal to be contingent on continued reciprocal fishing rights access, while Johnson wants British waters to be reserved chiefly for domestic exploitation.

On Jan. 1, the EU’s regulatory regime will cease to apply in Britain and a deal – if it is struck – would set out the new rules governing everything from customs checks and data-sharing to police cooperation.

A no-deal scenario would lead to serious economic disruption, affecting businesses and supply chains on both sides.

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As well as to offer to settle EU demands for Britain’s “divorce bill”.

British media said May would offer a two-year transition, including a commitment to meet post-Brexit payments for that period, at an estimated cost of at least 24 billion dollars for over two years.

May’s office said she will “discuss a vision for a bold new economic and security partnership and set out the prime minister’s plan for a time-limited implementation period, offering certainty and clarity to businesses and citizens.’’

“The eyes of the world are on us but if we can be imaginative and creative about the way we establish this new relationship I believe we can be optimistic about the future we can build for the United Kingdom and for the European Union,’’ May said in advance remarks from her speech.

May chaired a special cabinet meeting to discuss her much-anticipated speech, as critics warned that divisions in her Conservative government could make any new pledges largely symbolic.

In a sign of unity, Foreign Secretary Boris Johnson, Chancellor of the Exchequer Philip Hammond and other cabinet members are expected to be in Florence to watch May’s speech.

The BBC said May was likely to rule out both a Canadian-style free-trade deal with the EU after Brexit and a Norwegian-style agreement for Britain to join the European Economic Area while accepting unrestricted freedom of movement.

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