The British government has admitted that the bill breaks international law but says it was forced to pass it through parliament to protect the internal market of the UK against threats from the European Union.
"I think it's a precautionary defensive reaction," Mr Raab told a parliamentary committee, adding that no other country saw Britain as "anything other than a ... reliable defender of the international rules of law".
Meanwhile the European Commission Vice President Maros Sefcovic has said the EU wants a trade deal with Britain, but, as time is running out to reach one, the bloc cannot exclude that it will be impossible to reach agreement before the end of the year.
Speaking to the European Parliament, Mr Sefcovic said the EU's chief negotiator Michel Barnier and his team had the EU's full support.
"In case we reach an agreement, which is our objective, both parties will have to ensure ratification in time for an entry into force by Jan 1, 2021. This will need some time," he said.
"If this is not the case, we will be in the no-deal territory. Given that we are less than 100 days away from this day we cannot exclude this scenario," he said.
Mr Sefcovic also said that Britain's decision to push ahead with its internal market bill, which explicitly broke the country's withdrawal treaty with the EU, undermined London's credibility in talks.
"The full and timely implementation of the withdrawal agreement is simply not debatable," Mr Sefcovic said.
"The fact that our British friends now all of a sudden proposed a draft bill that is by its very nature a breach of the withdrawal agreement is a heavy blow to the British signature and reliability."
British Prime Minister Boris Johnson has said he did not particularly wish for the Brexit transition period to end without a new trade deal being in place, but that the UK could live with such an outcome.
The transition period ends on 31 December and intensive negotiations are ongoing between London and Brussels.