The Union Cabinet is expected to take up the issue of granting market economy status to Vietnam soon, a move that will see the south east Asian nation joining the India- ASEAN Free Trade Agreement.

".It is under active consideration. Cabinet is likely to take up the issue soon,"an official said.Vietnam, a member of Association of South East Asian Nation (ASEAN) bloc, had not signed the free trade pact with India on August 13, in Thailand.

Recently, Vietnam's Vice-President Nguyen Thi Doan, who had a meeting with External Affairs Minister SM Krishna here, had indicated that her country's joining the India- ASEAN trade pact would depend on New Delhi recognising Vietnam as a market economy.

China, Australia, Japan and New Zealand have already acknowledged Vietnam as a market economy.In market economy, input and output prices are determined by market forces to make the process transparent. The status would also help Vietnam become member of the World Trade Organisation, besides getting other benefits like fighting anti-dumping cases, a trade expert said. The other ASEAN members include Combodia, Indonesia, Malaysia, Philippines and Singapore.

The bilateral trade between India and Vietnam stood at USD 2.13 in 2008-09. The FTA that would break duty barriers on about 4,000 goods including steel, garments, minerals and ores would become operational from January 2010.