"Australia has not made any decision, they are looking at it," he said.

Upon meeting Dr Mahathir, 93, on Thursday, Mr Morrison said it was a great honour to meet "the elder of ASEAN".

On Wednesday, Mr Morrison told Indonesian President Joko Widodo that Australia would make a decision by Christmas on whether to move the embassy.

Morrison refuses to be rushed

Under pressure from Labor and business to dump the idea, Mr Morrison was adamant on Thursday he would not be rushed, and not have foreign policy dictated to by Indonesia or any other country.

"I've put in place a process to do it properly and to ensure the position we ultimately arrive at is one consistent with Australian interests and not related to other matters, because Australia has to be sovereign in determining its foreign policy," he said.

"We can't have it determined or our agenda set by any other nation. That's just a matter of treating yourself with respect."

Opposition Leader Bill Shorten said Mr Morrison has made a mistake.


"Frankly he made himself look stupid and made our country look stupid," he said

While the Indonesia FTA remains in limbo, negotiations between Australia and Hong Kong on a free trade agreement were concluded on Thursday, paving the way for the deal to come into force next year and ensuring Australia will have FTA's with seven of its top eight export markets.

The eighth is the European Union with which an agreement is being negotiated.

Zero tariffs permanent feature

Trade Minister Simon Birmingham, who is in Papua New Guinea for this weekend's APEC summit, finalised the deal with his Hong Kong counterpart Edward Yau.

Australia exported $12 billion in goods and $3 billion services to Hong Kong last year.

Hong Kong does not currently apply any tariffs on Australian exports but could choose to do so at any time, especially on key imports of coal, gold, zinc, ore, liquefied natural gas, as well as agricultural products.

It will also guarantee certainty of access for Australian suppliers of education, professional, financial, transport, construction, tourism and recreational services, he said.


Senator Birmingham said the FTA would make zero tariffs a permanent feature of the trade relationship, increasing certainty for exporters and presumably boosting business to Hong Kong and beyond.

"Hong Kong is an important market in which to establish brand recognition for Australian producers, given it is a gateway to the Chinese market and other parts of Asia," he said.

Hong Kong is a special administrative region of China but has a separate economy.

"Australia now has an FTA with China and Hong Kong, which reaffirms the value we place on the principle of one country, two systems," Senator Birmingham said.