Hopes of the Trans-Pacific Partnership (TPP) being settled this year have been dealt a blow by US politicians.
US Trade Representative Mike Froman (centre) speaks at a press conference for the TPP in Sydney in 2014. Photo: AFP / FILE
The Senate has voted not to allow debate on giving President Barack Obama so-called trade promotion authority, which would make it much easier for the US to fast-track its agreement to the deal.
The TPP requires the joint agreement of 12 countries, including New Zealand and Australia.
Senators voted 52-45 in favour of opening debate on the bill to allow trade promotion authority but fell short of the 60 votes needed to pass the motion.
The proposal was defeated mainly by the opposition of members of Mr Obama's own party, the Democrats, who wanted to add measures to protect US workers and prevent currency manipulation.
Washington correspondent Lorna Shaddick told Morning Report the setback was embarrassing for the president.
"The TPA [trade promotion authority] itself isn't dead; it just means that debate isn't being opened on it in Congress," she said.
"They'll have to go back to the drawing board and reconsider the legislation to try and redraw it in a way that is acceptable to both Democrats and Republicans to get it through the Senate, and then through the House."
Trade promotion authority would limit lawmakers to taking only a 'yes' or 'no' vote on any eventual trade deal without any power to amend it.
Ms Shaddick said an agreement between countries on the TPP was unlikely to be reached until negotiators knew that the free trade deal would pass in the US.
"President Obama may have to accept certain provisions in the [TPA] legislation in order to get it through the Senate, that he doesn't necessarily want, but those same provisions might in fact doom the negotiations that this legislation is supposed to boost. So - certainly some problems ahead for TPA and for TPP."
The setback may spell an end to any likelihood of the US being able to sign up to the TPP before the next presidential election in late-2016.
New Zealand's Trade Minister Tim Groser, who had earlier suggested a deal on the TPP could be reached by mid-2015, said he was concerned at today's vote result.
Mr Groser said the hope had been to reach agreement on the "fundamental political deal" before the spring break in Washington at the beginning of August.
"Everybody - certainly my team and myself - believed they had to pass this legislation for us to enter into what we call the end-game negotiation," he said.
"The best you can say about it is that it's going to cause a delay in that process."
He said it was unclear exactly how much of a delay it would cause for the free trade deal.
"What this shows is democracy is a messy process but they need to clean their act up for us to move forward."
The Green Party hoped the vote would force countries to take a different approach to the proposed deal.
The party's trade and investment spokesperson James Shaw said he did not think it would mean the end of the TPP negotiations.
But he said he hopes it would force countries to make changes to the proposed deal.
Auckland law professor Jane Kelsey said Mr Obama's failure to gain support to fast-track the TPP was a sign the deal should be ditched.
She said the New Zealand Government should accept the deal was unpopular.
"The country that stands to gain most from the TPP - the US - doesn't want it either. It's time for the minister to accept there is not support for this deal."
Ms Kelsey said it was time to meet people's objectives over those of corporations.
