Should a huge trade deal be ratified, the Australian government could be sued by foreign companies if it introduced or strengthened food labelling and product safety laws, says Choice.

In its submission to a committee examining the yet-to-be-ratified Trans-Pacific Partnership, the consumer group has urged the government to opt out of a clause that gives foreign companies the right to sue it if a new law harms their interests.

It says Australia has opted out of the clause with New Zealand, and should do the same with the 10 other signatories, including the United States and Japan.

"A deal with the 'investor-state dispute settlement' clause threatens future laws to protect and inform consumers," said Choice's chief executive Alan Kirkland.