The six-day meeting falls under the World Health Organization's Framework Convention on Tobacco Control (FCTC) that sets out measures to fight tobacco use through global cooperation.
"This is a global epidemic," Haik Nikogosian, head of the tobacco control secretariat, told AFP. "You don't fight a global epidemic nationally - you fight it globally."
As one of the most widely embraced treaties in the United Nations history, the FCTC aims for the illicit trade protocol to be adopted by 2010.
The issue is a fiscal concern for governments who lost billions of dollars to the trade and also faced health and policing challenges due to greater use of cheap cigarettes and the involvement of organised crime.
"Governments are losing billions of dollars to illicit trade. The estimate is between 40 and 50 billion dollars per year," said Nikogosian. "Many governments are losing amounts which are equivalent to their health budgets."
Also to be discussed at the conference is a report on alternatives to tobacco growing. Production of the crop has largely shifted to developing countries, where economies have a strong dependence on it.
Tobacco use has also rocketed in developing countries.
"Tobacco use is more or less being curbed now in developed world," said Nikogosian. "But in developing world its still increasing simply because the market has shifted there."
"The developing countries are very interested in this protocol and treaty issues because they in a way are taking the burden of the heightened regulations in the west."
Key decisions are also expected on the interference of the tobacco industry, packaging of products with picture-based health warnings, and tobacco advertising, promotion and sponsorship.
The existing FCTC agreement, signed in February 2005, aims to rein in the estimated five million annual deaths caused by smoking, which the WHO says will double by 2020 if nothing is done.