Algorithmic-Age Green Trade Governance: AI Empowerment, Institutional Transformation, and Legitimacy Reconstruction

Abstract

Green trade standards face a persistent governance trilemma of efficiency, equity, and legitimacy. Current frameworks are inefficient due to high monitoring costs, inequitable because they impose hidden barriers on developing countries, and suffer legitimacy deficits as unilateral measures challenge WTO rules. This paper explores how Artificial Intelligence (AI) can reshape this paradigm. Rather than offering a utopian fix, AI empowers governance through three mechanisms: cognitive empowerment, transparency and verification, and capacity building. A theoretical framework of “AI-enabled green trade governance” is proposed, drawing on global value chain governance, institutional embeddedness, and socio-technical transition theory. Evidence from the EU’s CBAM transitional period, blockchain-based traceability models, and agent-based negotiation simulations illustrates AI’s practical potential. The study argues that AI is driving a legitimacy shift from legal-procedural to techno-scientific foundations and calls for inclusive governance frameworks to ensure that digital tools enhance both fairness and effectiveness in global green trade.