Brexit minister Lord Frost said he wanted the situation with Brussels to improve, but highlighted ongoing problems with Northern Ireland's post-Brexit arrangements.
The Tory peer told MPs that the ability to diverge from EU regulations would be one of the big prizes of leaving the bloc, but acknowledged this could cause further difficulties over the Northern Ireland Protocol.
He told the Commons European Scrutiny Committee the relationship with Brussels "will be a bit bumpy for a time but there is a lot of business to be done" following the conclusion of the Trade and Cooperation Agreement between the UK and EU.
The Northern Ireland Protocol has been one of the early flashpoints in the UK-EU relationship following Brexit.
The protocol was designed to avoid a hard border on the island of Ireland, but it has angered unionists by effectively creating a barrier for the supply of goods between Great Britain and Northern Ireland.
Under the deal, Northern Ireland is tied to a range of EU customs and regulatory rules, while the rest of the UK is intent on diverging from Brussels' terms.
Lord Frost said issues over the supply of a cancer drug highlighted the problems as he called for the EU to allow the protocol to operate in a "balanced and pragmatic way".
Reports have indicated that Osimertinib, which was approved for use in lung cancer patients by British regulators, has been blocked from widespread use in Northern Ireland.
The European Commission has said it is "entirely incorrect" to blame Brussels, arguing the protocol and other arrangements "ensure the continued availability of medicines" in Northern Ireland.
But Lord Frost told MPs that "despite a little bit of dust thrown in the eyes by the EU" it was "clear that they are asserting their right to regulate cancer drugs in Northern Ireland rather than the UK doing that".
In a Mail on Sunday article, Lord Frost warned the government continues "to consider all our options" as he said the situation caused by the Northern Ireland Protocol that he negotiated "cannot be sustained for long".