Trade ministers from the 12 nations negotiating the Trans-Pacific Partnership, which would stretch from Japan to Chile and cover 40 percent of the world economy, fell just short of a deal at talks on the Hawaiian island of Maui but were confident an agreement was within reach.
"The undergrowth has been cleared away in the course of this meeting in a manner that I would say is streets ahead of any of the other ministerial meetings that we have had," New Zealand Trade Minister Tim Groser said.
"You can see clearly that there are one or two really hard issues, and one of them is dairy."
Australian Trade Minister Andrew Robb said the problem lay with the "big four" economies of the United States, Canada, Japan and Mexico. "The sad thing is, 98 percent is concluded," he said.
The talks, which drew about 650 negotiators, 150 journalists and hundreds of stakeholders, had been billed as the last chance to get a deal in time to pass the US Congress this year, before 2016 presidential elections muddy the waters.
The TPP seeks to meld bilateral questions of market access for exports with one-size-fits-all standards on issues ranging from workers' rights to environmental protection and dispute settlement between governments and foreign investors.
The result frustrated negotiators who had toiled through the night to cross off outstanding disputes. US Trade Representative Michael Froman said resolved issues included protection for regional food specialties.
Japan's Economy Minister Akira Amari said that TPP member nations could reach a deal if they meet one more time, and his understanding was that the ministers aim to get together again by the end of August.