Stratocaster, iconic US rock guitar flourished under NAFTA

The truth is, however, that for about half of its 63-year existence, those guitars have to a large extent been manufactured in Mexico.

And as US, Mexican and Canadian officials open talks Wednesday in Washington on revamping the 1994 North American Free Trade Agreement, the Mexican-made Stratocaster stands as an example of how liberalized trade has encouraged seamless cross-border supply chains — ones that may be almost impossible to undo.

Unlike major automakers benefitting from NAFTA, the half-billion-dollar US guitar industry does not employ hundreds of thousands of workers who ship billions in product.

Still, in common with the bigger manufacturers, guitar makers like Fender, CF Martin & Co and Taylor have turned to Mexico as a source of cheaper yet still skilled labor, and to take advantage of NAFTA’s duty-free export to the United States.

– Trade vital to guitars –

As the US, Mexico and Canada prepare to revamp the 1994 North American Free Trade Agreement, the Mexican-made Stratocaster stands as an example of how liberalized trade has encouraged seamless cross-border supply chains that may be almost impossible to undo

The regional trade deal means they can compete with cheap imports from Asia.

“Trade is vital to guitar manufacturers and any US manufacturer that can get any of its manufacturing done internationally will benefit,” Rory Masterson, an industry analyst at the research firm IBISWorld, told AFP.

The Stratocaster’s sleek and ergonomic body gave an unmistakable silhouette to British and American bluesmen and rock heroes like Stevie Ray Vaughan, Buddy Guy, Eric Clapton, Jeff Beck and Eddie Van Halen, and created a market among wannabe rockers who tried to emulate them.

Since the US Congress ratified NAFTA in 1993, US imports of Mexican-made guitars valued at $100 or more have risen 90 percent, reaching $38 million last year, according to US government data.

Largely thanks to NAFTA, Mexico is now the third-largest source of US guitar imports after China and Indonesia, generating 21 percent of foreign-made guitars sold in the United States, according to Masterson.

Imports account for about a third of US demand, he said.

Like other companies, if the NAFTA renegotiation concludes with tougher rules of origin or new barriers for Mexican-made guitars, Fender would have to adjust.

“If there was a new tariff that came up, it wouldn’t be unbelievable to see them close down that plant and move to a place to where they can trade more freely,” Masterson said.

Fender Music Instruments Corporation, now the largest US guitar maker by market share, set up a Stratocaster plant in 1987 in the Baja California town of Ensenada, about 65 miles (105 kilometers) south of the US border, where Mexican workers produce a serviceable, workhorse version of the iconic guitar.

Guitarists say the US-made Stratocaster exhibits finer craftsmanship and produces a significantly better sound, but the Mexican version retails at about half the cost: around $600.

Fender’s limited edition Jimi Hendrix Monterey Stratocaster, launched for the 50th anniversary of the Monterey music festival, will retail for $899.99.

– Tightly integrated supply chains –

From its start in 1954, the Stratocaster embodied designer Leo Fender’s idea of an industrial instrument, easily mass-produced using interchangeable parts and contemporary manufacturing technology, said Alan di Perna, co-author of the electric guitar history “Play it Loud.”

“That’s why it lends itself to offshore manufacturing,” he told AFP. “If your neck brakes, you can bolt a new one on in half an hour.”

Under NAFTA rules, products that are substantially created within the region can enjoy duty-free movement throughout the three member countries, even if they contain parts made outside North America.

But Fender is privately held and declined to answer questions from AFP about its production and imports from Mexico.

Morris Cohen, a professor of manufacturing and logistics at the University of Pennsylvania’s Wharton School, told AFP he toured a Mexican guitar factory with students on November 9, the day after President Donald Trump clinched the White House after campaigning against NAFTA.

“They were not that concerned,” he said of the Fender workers.

Virtually every global manufacturer produces high-quality goods in Mexico, in factories using sophisticated techniques, he said.

“They’ve set up efficient mechanisms for integrating and coordinating these supply chains,” Cohen said. “It would be very difficult to rip it apart.”