Prime Minister Malcolm Turnbull has held talks with Malaysia's Prime Minister on the sidelines of the APEC Summit in Lima, but is playing down the prospects of a refugee resettlement deal with the predominantly Muslim nation.

Key points: Turnbull and Razak discuss terrorism, trade, South China Sea and more

Turnbull and Razak discuss terrorism, trade, South China Sea and more Labor says they would welcome a refugee resettlement deal with Malaysia

Labor says they would welcome a refugee resettlement deal with Malaysia Turnbull puts weight behind TPP, hope US will embrace the deal in future

Malaysia is known to be one of several countries Australia is negotiating with to expand the network of settlement options for refugees on Nauru and Manus Island.

Mr Turnbull and Prime Minister Najib Razak discussed terrorism, returning Islamic State fighters, trade, the South China Sea and what officials describe as "irregular migration".

Before the meeting Mr Turnbull was asked whether Malaysia may assist with resettlement as it had in 2011 with its ultimately thwarted "people swap" arrangement with the Gillard government.

"We engage with many countries, we engage on resettlement matters with many countries that are part of the Bali process, but we don't speculate on those discussions," Mr Turnbull said.

"We have had success with Cambodia, we have had success with the United States and we talk to other countries — and we will continue to do so."

The Prime Minister has indicated that "when agreement is reached, we make an announcement".

Deputy Labor Leader Tanya Plibersek said her party would welcome a deal with Malaysia, but told Sky News the Government should apologise for its hypocrisy.

The Coalition had opposed a deal with Malaysia when it was in opposition five years ago, citing human rights concerns.

"All those people who voted against Malaysia as a country for resettlement when Labor was in government should explain why they did it," Ms Plibersek said.

"It shows a degree of cynicism and unfitness for government."

Turnbull says US may re-embrace TPP in future

Following Mr Turnbull's discussion with Mr Najib, both men entered the APEC summit venue to put their weight behind the stalled 12-member regional trade deal, the Trans-Pacific Partnership.

The US Congress is refusing to ratify the pact and most observers believe it is doomed from January when US President-elect Donald Trump takes office.

But Mr Turnbull and fellow TPP supporters are undeterred and staged a display of their determination at a high-profile meeting led by the outgoing US President Barack Obama.

"It may well be that over time the TPP is re-embraced by the United States, by the Congress, or indeed by the President," Mr Turnbull said.

"Free trade really is a long game ... there have been other American administrations in terms of the presidency and in terms of the Congress who have changed their minds."

The gathering of leaders of TPP countries acknowledged that "advocates of open trade were facing global headwinds".

Officials at the private talks said the meeting urged against "jumping to conclusions as to how President-elect Trump would approach trade policy", preferring to wait until a new US trade representative was appointed before forming a view.

The 'road to ruin' for Australia

For the second time on his overseas trip, Mr Turnbull has gone on a domestic offensive against the Labor Opposition for its renewed interest in clamping down on foreign guest workers entering Australia on 457 visas.

"I have talked about protectionism not being a ladder to get out of the low-growth trap but a shovel to dig it deeper, well, Mr Shorten has got that shovel and he's digging deep.

"He is being wooed by the siren song of populism, he thinks he has picked up something from the American election and he can tap into that, but it is the road to ruin for Australia."