Indonesia's Mandatory Halal Certification: The Potential of a Technical Barrier to Trade as a Trade Promotion Tool

Abstract

The World Trade Organization (WTO) has established frameworks to minimize barriers and promote beneficial international trade. While trade liberalization fosters market expansion and economic growth, it also intensifies competition. In response to reduced traditional trade restrictions under GATT, countries have increasingly adopted Technical Barriers to Trade (TBTs), sparking debate over their restrictive versus beneficial impacts. Indonesia’s Halal Act (Law No. 33/2014) introduces a TBT through mandatory halal certification for products in its market. This study examines (i) the classification of Indonesia’s halal certification as a TBT under GATT and the TBTA and (ii) its potential impact on Indonesia’s international trade. The findings suggest that while halal certification functions as a TBT, it can also serve as a trade-promoting mechanism, reinforcing Indonesia’s position in the global market.