Indonesia says it cannot comprehend Australia's "mind-boggling" explanation that spying on sensitive trade talks was a national security matter.

The New York Times has published claims the Australian Signals Directorate gathered intelligence for America during Indonesian trade negotiations last year.

It says a top-secret 2013 document obtained by former National Security Agency (NSA) contractor Edward Snowden showed the agency carried out surveillance on a US law firm representing Indonesia.

Prime Minister Tony Abbott has refused to comment on the matter, but says anything that is gathered is "for the benefit of our friends".

Indonesian foreign minister Marty Natalegawa says he cannot understand how the talks could be a security matter for Australia.

"I find that a bit mind-boggling and a bit difficult how I can connect or reconcile discussion about shrimps and how it impacts on Australia's security," he told reporters.

"In my view, in our view, neighbours like Indonesia and Australia – we should be looking out for each other, not turning against one another."

Indonesia has been embroiled in trade disputes with the US over its exports of clove cigarettes and shrimp in recent years.

The Times report did not say which trade dispute was monitored nor did it name the US law firm involved.

The NSA has refused to comment, but in a broad statement said any allegation it relied on foreign partners to circumvent US law is absolutely false.

Mr Natalegawa's comments came during a joint press conference with US secretary of state John Kerry, who also responded to questions about the report.

"We take this issue very seriously, which is why President Obama laid down a series of concrete and substantial reforms," Mr Kerry said.

Claims come amid tense relations

Relations between Australia and Indonesia plunged to their lowest ebb in years in November after reports Australia tried to tap the phones of president Susilo Bambang Yudhoyono, his wife and several top officials in 2009.

Jakarta responded furiously to the claims - which were based on documents leaked by Snowden - recalling its ambassador and suspending cooperation with Australia on key areas including people smuggling.

The latest leak comes as tensions simmer between Canberra and Jakarta over Operation Sovereign Borders.

Dr Natalegawa has said he would raise Australia's asylum seeker policies with Mr Kerry, describing them as "against the values of humanity".

Australian warships have strayed into Indonesian waters during border patrol operations, although Canberra insists the intrusion was inadvertent.

Mr Abbott has said Australia "deeply respects Indonesia's sovereignty".

"We want to work as close as possible with Indonesia to crack down on the scourge of people-smuggling, which as we all know has cost this country dear," he said.

The Federal Government has blasted Snowden, with Foreign Minister Julie Bishop lashing out at his "unprecedented treachery" and describing him as "no hero" in a speech in Washington last month.

ABC/wires