In an effort to get the Trans-Pacific Partnership agreement ratified before a new president and Congress take over next year, the White House Council of Economic Advisors has warned that congressional failure to pass the 12-nation free trade deal means U.S. firms could lose out to China in the Japanese market, resulting in the loss of potential business and nearly 5 million jobs.

"In the absence of TPP, countries have already made it clear that they will move forward in negotiating their own trade agreements that exclude the United States. One such agreement is the Regional Comprehensive Economic Partnership, a trade agreement that involves China, Japan and many of the dynamic and fast-growing economies of Asia, which could potentially fill the void left if Congress fails to pass TPP," the council said in its latest report released Thursday.

"There are, conservatively, 35 goods-producing industries directly at risk of increased competitive pressure from China in the Japanese market if RCEP goes into effect. These 35 industries account for just under 10 percent of total U.S. exports of goods to Japan. (They) employ close to 5 million workers and maintain 162,000 business establishments in the U.S.," the report added.