A clause in any Trans Pacific Partnership Agreement could open the Government up to legal action from tobacco companies keen to protect their branding.
Cabinet ministers have agreed in principal to ban cigarette branding, instead introducing plain white packaging.
First Union general secretary Robert Reid has welcomed the move but says an investor state relations clause is likely to be included in any partnership agreement.
"Which actually means that companies such as tobacco companies are able to sue and take to court countries for reducing their profitability."
Mr Reid says plain packaging is better for low paid smokers, rather than simply increasing the cost of cigarettes.