The former Govan MP also insisted Theresa May has been "quite sensible" in blocking a second referendum, which he said shouldn't take place until at least 2020.
Mr Sillars is a euro-sceptic who has previously said he will vote No in a future referendum if it means rejoining the EU.
"Nicola seems to have predicated all her statements on a `hard Brexit' - what if it's not?" he said today.
"Look at the trade figures and you hear what people are saying - not the politicians, the one's who will be most affected, that's the business people and the Trade Unions. They (the EU) export £690 billion a year to us and send back £628 billion.
"There's a trade advantage to them at the moment."
The former Govan MP cited recent comments from a German BMW executive calling for a free trade deal and said Spanish business is getting "very upset" at the prospect of trade tariffs in dealing with the UK.
"It seems to me that Nicola has not taken on board what happens if it's a good deal" he added.
"I think myself there's going to be a free trade deal. I think it might be as part of the deal that the UK will continue to make some contribution to the EU financially, but it may well be through a Norway-type scheme rather than a direct contribution.
"I would think free trade is the most likely development given the business interests on both sides."
Mr Sillars dismissed the idea of a second independence vote as early as next year, but said it will happen eventually.
He said: "I think Theresa may is actually quite sensible. You don't put in front of the Scottish people a choice of independence when we don't know what the Brexit deal is going to be.
What will matter to us in the Brexit deal is our biggest trading market which isn't the European Union which only takes 12%, but the rest of the UK which takes 64% of Scottish exports of goods and services.
"So where England stands is going to be quite important to how we deploy the argument for leaving."
He also warned it is "very clear" that Spain will veto an independent Scotland joining the EU to discourage separatism in Catalonia and warned that Ms Sturgeon will have to "eat a fair chunk of humble pie" if she shifts towards joining EFTA (European Free Trade Association) after dismissing this option in 2014.