A major trade deal with Indonesia was due to be signed before Christmas, but Scott Morrison now says there is "no rush" to get it done.
The prime minister confirmed he will not sign the deal when he meets President Joko Widodo at a series of summits and high-level meetings this week.
Indonesia is upset about Australia's potential move of an embassy to Jerusalem, with reports the deal is on hold until the issue is sorted out.
"The intention was the trade ministers would be able to deal with that by the end of the year, but there's no hurry," Mr Morrison told Bloomberg on Monday.
"Australia doesn't conflate these issues."
Mr Morrison will attend the East Asia Summit in Singapore and APEC in Papua New Guinea this week to talk about trade, regional security and counter terrorism, in what will be his first summit season as leader.
He is aiming to meet with Chinese President Xi Jinping when he goes to APEC in Port Moresby or the G20 in Buenos Aires.
But he said he won't be publicly pushing China over its decision to put Uighur Muslims in re-education camps.
"We always raise any concerns that we have, particularly about human rights issues," Mr Morrison told Sky News.
"We do that privately, we do that directly when we do these things. We don't get into showboating about these things."
With the US and China squaring up over trade, progressing a 16-country Regional Comprehensive Economic Partnership will be a major focus in Singapore.
The free trade pact includes the 10 member states of the Association of Southeast Asian Nations as well as Australia, China, India, Japan, New Zealand and South Korea.
The deal - which does not include the United States - is considered increasingly important after President Donald Trump pulled out of the Trans-Pacific Partnership trade agreement last year.
Leaders are also due to discuss violence in Myanmar and tensions in the South China Sea.
Jean Bogais, a specialist in Southeast Asia at the University of Sydney Business School, identified concerns around Chinese foreign investment as major topic for ASEAN.
"Many fear they are losing custody - if not control - of some of these situations," Associate Professor Bogais told AAP.
In between the ASEAN and APEC meetings, Mr Morrison will fly to Darwin to meet with Japanese Prime Minister Shinzo Abe.
Mr Abe will be the first Japanese leader to visit Darwin since Japan bombed the city in 1942 and 1943, killing more than 250 people.
Mr Morrison will also meet with Pacific leaders in PNG to talk about Australia's new focus on island nations.
