Malaysian and Indonesian leaders discussed yesterday the sensitive migrant workers issue while agreeing on an ambitious bilateral trade target of US$30 billion by 2014.

Malaysian Prime Minister Najib Razak hosted President Susilo Bambang Yudhoyono in the Malaysian administrative capital of Putrajaya for the ninth annual consultation.

Labour activists expected Yudhoyono to put pressure on Najib during the meeting, which coincided with International Migrants Day, to provide better protection for Indonesian workers.

However, according to presiden-sby.info the presidents spent little time on labour issues.

"According to the president, some issues need a better approach, including labour. The President expressed his appreciation to the Malaysian government for its help in providing education for children of Indonesian workers, particularly those in Sarawak," the website says.

Najib claimed that Yudhoyono had agreed to renegotiate fees for labour agencies recruiting and placing Indonesian domestic workers.

"We discussed matters related to manpower, with reference to the Lombok agreement. There are some complications in terms of agency fees, which are rather high. The Indonesian President has agreed that agency fees should be set at a more reasonable rate to allow the Lombok Agreement to be implemented," Najib said in a joint-statement with Yudhoyono after the meeting, as quoted by The Star.

Najib was referring to the previous Indonesia-Malaysia consultation in Lombok during October 2011, when both leaders agreed to resume the flow of Indonesian workers to Malaysia, but under tighter conditions.

The agreement states that prospective employers need to pay a 4,511 ringgit ($1,476) agency fee, which includes 2,711 ringgit to be paid to the agency and a 1,800 ringgit advance payment to the worker, which employers recover in installments from the worker's salary over six months.

Malaysia is home to the largest pool of Indonesian migrant workers, 1.9 million as of July.

Presidential spokesman for foreign affairs Teuku Faizasyah said Yudhoyono and Najib agreed to look for better ways of resolving labour issues.

"Both heads of government agreed to address obstacles to implementing the Lombok Agreement, particularly those concerning labour issues," he told The Jakarta Post.

The trade target reflects the seriousness of the two governments in forging economic collaboration, Bernama news agency reported.

Najib said that the two countries believed the target was attainable, given the rapid pace of development in neighbouring nations. Trade in 2011 was $21.40 billion, up from $18.01 billion in 2010. In the first half of 2012, the trade balance was $13.31 billion, 8.7 per cent up on 2011.

Najib added that Malaysia was the sixth-largest investor in Indonesia.

Yudhoyono said there were still plenty of ways to improve economic cooperation between the two neighbours in the future.

"There is still plenty of opportunity for further cooperation and we have agreed to think about long-term economic cooperation," he told Bernama.

On Wednesday, Yudhoyono will receive an honourary Doctor of Philosophy in Peace Leadership from North Malaysia University. He will then leave for India to attend the Asean-ndia Commemorative Summit marking 20 years of relations between the Southeast Asian regional group and India. He is also scheduled to attend the Indonesian Students Association (PPI) world conference in New Delhi.

In Jakarta, labour activists condemned Yudhoyono's decision to accept the honourary degree, saying that it would hurt hundreds of Indonesian migrant workers on death row in Malaysia.

Bagus BT Saragih contributed to this article