Chancellor Sajid Javid is confident that UK trade will be "better off outside of the EU" despite the fact that border checks will enter force at the end of the year.
Although frictionless trade with the bloc will end when the Brexit transition period lapses after December 31, Javid reassured that supply chains “would be protected”.
He told the BBC: "Of course, we are not going to have completely frictionless trade because we have left the customs union and single market.
"That is a deliberate decision, because we have a better future as an independent sovereign nation trading with European friends, but also trading more so with the rest of the world."
Javid also pledged “complete equivalence” for the automotive sector and other areas of UK industry which rely on frictionless trade with the continent.
He explained: "We are working closely with the car sector. We’ve been clear there will be some changes but that can be done in a way that the sector... continues to thrive."
The chancellor is also optimistic that the EU will change its stance on "permanent equivalence" for the UK finance sector and granting it continued access to the bloc.
Chief EU negotiator Michel Barnier had previously rebuffed the idea, but after "private discussions" with EU officials, Javid said he was "confident" that the outlook would alter.
Javid said: "Looking back at the withdrawal agreement, there were things that the EU would reject... only to change their mind later on.”