Mr Key said there was only a small window of opportunity before the United States presidential nominations and elections made it more difficult to continue negotiations.
"There is a finite window where if we can't complete the deal in that time if becomes more difficult, in particular for the United States and others," Mr Key said. "I'm not sure we have the luxury of saying you can wait until another year down the track because we'll be right in the middle of US presidential nominations and the elections."
He still remained confident of securing a deal this year.
This was despite looming elections in Canada, which New Zealand was battling for improved dairy access and lower tariffs.
"In the end, the question for Canada is the same question that is posed by any country - are you going to be better being in it or being out of it?"
The Prime Minister reiterated the benefits of any deal to New Zealand, saying it gave investors and exporters access to 800 million customers in 11 Pacific Rim countries.
He also accentuated that negotiators were seeking the best deal for New Zealand, "but of course not at any cost".
NZ International Business Forum executive director Stephen Jacobi said the stalled negotiations in Hawaii were not a "fatal" setback.
"There are now fewer outstanding issues on the table. If negotiators and ministers can get together soon - hopefully before the end of the month - the momentum can be maintained and any backsliding from what was agreed in Maui can be prevented.
"The longer it takes to re-engage, the harder it becomes," he said.
Tight schedule
• June 2015: US President Barack Obama gets fast-track authority to negotiate the TPP.
• July 2015: Trade ministers of the 12 TPP countries meet in Maui for what was hoped to be the final negotiations. Ends in impasse over dairy, automobiles and pharmaceutical patents.
• August: a last-ditch effort to reach an agreement is likely before Canada's election in October
• If that fails, progress could be derailed because of US elections in 2016.
