Disabling Labelling in Indonesia: Invoking WTO Laws in the Wake of Halal Policy Objectives

Abstract

AbstractThe 2014 Halal Product Assurance Act (Halal Act) is the first law in Indonesia requiring mandatory Halal certification and labelling. Local and foreign business entities, while in agreement that Halal assurance through certification and labelling is important for Muslim consumers, have expressed their anxiety over whether such requirements will mean extra costs, particularly for small and medium enterprises. At the same time, the mandatory labelling regime involves several WTO issues under the TBT Agreement, which raise questions regarding Indonesia's compliance with its obligations. As a defence, Indonesia could argue that its mandatory halal labelling measure falls under the exception for protecting ‘public morals’. The WTO panel in theUS–Gamblingdispute noted that the meaning of ‘public morals’ and ‘public order’ varied depending on a range of factors, including prevailing social, cultural, ethical, and religious values. Should the WTO allow all types of moral and religious belief, even if they restrict trade? How can public moral policy objectives be applied in ways that do not violate WTO law? This paper seeks to examine the WTO consistency of the new Indonesian Halal Act, and whether the public moral objective underlying mandatory halal certification/labelling can be defended as an exception in the context of the TBT Agreement.