Halal Trade Agreement with the U.S.: Is Indonesia Preparing to Become a Market Again?

Indonesia and the United States have signed the Agreement toward a New Golden Age US–Indonesia Alliance. One of the most discussed points is the reported exception related to halal certification for U.S. products. The government has since clarified that foreign products entering Indonesia must still obtain halal certification and display halal labels, whether issued by recognized halal institutions in the United States or by Indonesian authorities.

However, the core issue is not whether U.S. products are halal.

The real concern arises when halal regulations begin to feature in international trade negotiations. In other words, halal obligations risk being treated as components of trade agreements rather than as sovereign regulatory mandates.

This matters because the halal economy is not marginal. The global halal market is projected to reach approximately USD 1.3 trillion, or around IDR 20,670 trillion, by 2025.

At the same time, Indonesia currently ranks third in the global halal industry ecosystem and is home to the largest Muslim population in the world. Structurally, this gives Indonesia a significant opportunity to position itself as a global production and export hub for halal products.

That opportunity weakens if Indonesia primarily functions as a market. In practical terms, this means halal products from various countries enter to meet domestic demand, while the local halal industry does not develop as robustly as it could.

This leads to a critical question: if halal certification becomes part of trade negotiations, will the obligation continue to apply equally to all products? Or will Indonesia gradually become a destination market for foreign products that already carry halal labels from their home countries?

Indonesia already has a clear legal foundation through Undang-Undang Nomor 33 Tahun 2014 tentang Jaminan Produk Halal, implemented by Badan Penyelenggara Jaminan Produk Halal (BPJPH). The principle has been firm: halal certification is a form of consumer protection and a state obligation, not merely a commercial option.

Yet in global trade practice, the approach can shift. When halal standards are discussed within trade agreements, their status may gradually move from regulatory requirement to market preference. In such a scenario, foreign products continue to enter the market, while halal labeling functions primarily as a value proposition to attract Muslim consumers in Indonesia.

If policy direction evolves this way, Indonesia indirectly positions itself as a market for global halal products rather than as a leading industry player. This is particularly significant given Indonesia’s demographic advantage and its potential to become both a production center and an exporter of halal goods.

Ultimately, what is at stake is not simplythe certification procedure. It is Indonesia’s position within the global halal economy. Will the country lead the industry and shape its standards, or will it serve primarily as a large consumer base for halal products produced elsewhere?

This issue is equally important for local businesses. For them, halal certification is not merely a label. It involves audits, raw material adjustments, production changes, periodic documentation updates, and associated costs. If imported products are perceived to receive greater flexibility, the debate moves beyond religion and into the realm of competitive fairness.

When halal policy repeatedly becomes part of trade transactions, Indonesia risks drifting toward the role of market rather than industry leader. The strategic choice lies in whether halal remains a firm regulatory pillar or becomes a negotiable trade variable.