It's been argued that NAFTA, the North American Free Trade Agreement, is simply an attempt by the United States to make use of another country's labor resources, without having to adopt their people and their problems. Do you see it that way?
Milton Friedman: Not at all. On the contrary, as far as NAFTA is concerned, it really is a minor thing, from the point of view of the United States. After all, the United States is a very much larger economy than Mexico. The main beneficiary for NAFTA will be Mexico and the people in Mexico, not the people in the United States. There's no doubt in my mind that that is the net effect. Mexico is doing very well by reducing the role of government, by introducing free market ideas, cutting tariffs, getting government out of business, privatizing banks and other businesses that government had taken over. NAFTA will be a little extra push for them, which will help them much more. It will help us a little, but a trifle. You know, nothing is good unless both parties benefit from it, and both Mexico and the United States will benefit from it.
If NAFTA proves to be profitable for the U.S., do you think the Free Trade Agreement will expand to include South America and other countries?
Milton Friedman: I would hope so. NAFTA is misnamed, it's not a Free Trade Agreement, it's a Managed Trade Agreement. I supported NAFTA, as a lesser of evils, but it would be better if we in the United States would simply reduce our tariffs across the board for everybody in the world. As far as Latin America is concerned, it's been showing remarkable changes. Beginning with Chile, going on to Mexico, now Argentina, one country after another in Latin America has unilaterally been lowering its tariffs, opening its markets up. If we are sensible, we certainly will go as rapidly as we can to expand NAFTA to include all of the rest of the Latin American countries. I believe that that is what will happen.
Well done. Thanks for establishing that Friedman was not opposed to NAFTA.