Parliament is opposed to granting Swiss expatriates a seat in the chambers.
The Senate on Monday rejected a proposal calling for a draft law setting the legal basis for seats for expatriates in both parliamentary chambers.
Opponents argued that there was no justification for setting up a special constituency for citizens spread across the globe.
The proposal won a majority in the House of Representatives last September.
Supporters said expatriates currently had very little chance of being elected to parliament. Forty expatriates stood in the 2007 elections, but none of them was successful.
The Organisation of the Swiss Abroad (OSA) said the debates showed growing recognition of the expatriate community in politics.
Nearly 700,000 Swiss nationals live outside Switzerland, of whom more than 120,000 have registered to vote.