U.S. May Back Taiwan Bid to Join World Trade Body : Diplomacy: Such an endorsement would likely provoke China. Beijing is also seeking membership in GATT.

The Bush Administration, in a move that could provoke a nasty confrontation with China, has taken a first step toward supporting Taiwan’s application to join the organization that administers the world’s trading system.

U.S. strategists disclosed Monday that an interagency task force has endorsed as economically sound Taiwan’s proposal to become part of the 97-country General Agreement on Tariffs and Trade. The issue now goes to the National Security Council for an evaluation of the political consequences.

Senior Administration officials say that President Bush, who is under pressure from Congress to approve Taiwan’s bid, could decide the issue by mid-March. Although U.S. support would not automatically guarantee membership for Taiwan, U.S. and GATT officials said the necessary consensus in the organization would probably form quickly if the United States signaled its approval.

The government of China has warned that accepting Taiwan into GATT would violate almost two decades of understandings between Washington and Beijing.

Until recently, there had been an unspoken agreement that China would join GATT first, to be followed by Taiwan a few years later. China won observer status in GATT--a prelude to full membership--in 1986.

But the Chinese army’s massacre of political protesters in Tian An Men Square last June 3-4, followed by China’s refusal to proceed further with economic reforms, has put that process on hold.

Taiwan applied for GATT membership Jan. 1 in an attempt to take advantage of worldwide reaction against the Tian An Men Square incident. To get around reluctance to admit Taiwan alone, it applied for membership as part of a customs union that includes three neighboring islands.

Top Bush Administration economic policy-makers say they see no trade-related reasons for denying U.S. support to Taiwan. Taiwan already is a major U.S. trading partner and is rich with cash reserves.

But they concede that the decision will be made mainly on political grounds. U.S. support of Taiwan’s new bid would mark the furthest the United States has gone in a decade to confer formal status on Taiwan, which China still considers to be a renegade province.

Administration officials say the review being conducted by the National Security Council, expected to be completed shortly, will focus primarily on the implications of the move for U.S.-Chinese relations. The issue then goes to the President for a final decision.

Members of Congress, already dissatisfied with the Administration’s insistence on maintaining close contacts with China in the wake of the Tian An Men Square incident, have begun pressuring the White House to support Taiwan’s application.

In a bipartisan move, 23 members of the House Ways and Means trade subcommittee have written the President urging him to support Taiwan’s bid. The move, they said, would “not only serve U.S. interests but also strengthen the trading system itself.”

The Senate Finance Committee is drafting a similar letter.