Democrats in Congress, under pressure from trade unions worried about the loss of manufacturing jobs from free trade, on Friday turned against the President at the eleventh hour on a bill intended to pave the way for the US to finalise the TPP with negotiating countries.

Unless the Congress grants Mr Obama so-called "trade promotion authority" (TPA), countries like Australia and Japan are unlikely to sign the TPP, a pact that would cover more than 40 per cent of the world's economy and set sweeping new rules for trade, investment, intellectual property, labour and the environment.

"Trying to ratify the TPP in US Congress without TPA will kill the agreement," said Shiro Armstrong, a co-director of the Australia-Japan Reserach Centre at Australian National University.

"The Japanese side has rightly made it clear it will not conclude the bilateral negotiation or show all its cards until the President has TPA."

President Obama has been hitting the phones all weekend to shore up a second attempt at a vote on the bill next Tuesday. Reuters

The House will hold another crucial vote on Tuesday in an attempt to win support for the trade legislation.

Minister for Trade and Investment Andrew Robb admitted the Democratic "no" vote was a setback, but remained optimistic a deal could be struck.

"There is always a lot of cut and thrust in these things and politics being played," Mr Robb said.


"There is another opportunity to get the ducks lined up but second guessing the US is always difficult."

"I remain hopeful the relevant legislation will ultimately pass which would provide the necessary momentum to conclude the negotiations."

Major TPP countries like Japan and Canada are highly unlikely to sign the TPP and drop agriculture tariffs and import restrictions, unless they have confidence Mr Obama can push the TPP through Congress.

At the heart of the US domestic political debate is a fight between pro-free trade Republicans and sceptical Democrats worried about international trade sending blue collar jobs to cheaper labour countries like Vietnam (see below).

In an unusual alliance, Mr Obama has teamed up with Republican rivals like Paul Ryan, a former US vice president candidate and chair of the House ways and means committee.

Unless Mr Obama is granted TPA, also known as fast track, trade experts say the TPP won't be concluded by the negotiating countries.

TPA allows Mr Obama to finalise a trade pact with other countries, and prevents Congress changing the details of a deal, only giving lawmakers a yes or no vote on the TPP.

The House on Friday tried to pass two pieces of trade legislation, after the Senate approved the bill this month.


The package fell apart after Democratic House minority leader Nancy Pelosi and her colleagues reneged on approving the proposal.

Democrats, largely for political tactical reasons, rejected a trade adjustment package of about $US1 billion intended to compensate workers disrupted by trade. The final vote tally was 126-302.

"Its defeat, sad to say, is the only way that we would be able to slow down the fast track," Ms Pelosi said.

The rebuff shocked the White House, because the measure was proposed by Democrats to offset the ostensible negative impacts on local jobs in return for granting Mr Obama TPA.

While the TPA part of the bill subsequently won a narrow majority of support in the House by a margin of 219-211, including 28 Democrats, the vote was in effect irrelevant.

TPA and trade adjustment authority for worker-aid both need to both be passed together, to match identical legislation approved by the Senate.

Mr Obama on the weekend urged lawmakers to reverse their opposition.

"These kinds of agreements make sure that the global economy's rules aren't written by countries like China; they're written by the United States of America," Mr Obama said.

If the US fails to secure the TPP with the 11 other countries, it would be a major blow to President Obama's "rebalance" to Asia.