What is dynamic alignment?
Dynamic alignment is the idea that parties to a trade agreement maintain equivalent regulatory standards to each other in future. This is a means to ensure fair competition, or a level playing field, for companies on both sides. If one increases its standards, others do so in parallel. Initially, the EU wanted the UK to sign up to dynamic alignment with EU state aid rules. The UK rejected this approach as unjustifiably limiting its future regulatory freedom. Instead, non-regression and a so-called ratchet clause have been the basis for discussions to ensure fair competition in future.