ELKTON, Va.—This story ends down in America’s Deep South, with a report on how a $3.7 billion foreign investment in Alabama that will create thousands of American jobs has sparked vigorous complaints from the US steel industry and the Steelworkers union that it is “unfair.” But it begins quietly on another note here in this pretty little Virginia community (pop. 2,212) nestled in the Shenandoah Valley nearly 100 miles southwest of Washington, D.C. Together, the two otherwise unrelated parts of this article illustrate that while trade liberalization — especially when tariffs are slashed in so-called US Foreign Trade Zones — is clearly beneficial to the US economy, free trade remains politically controversial.

At first glance, Elkton hardly suggests a shining success story that illustrates the benefits of international trade. The deep economic recession has (alas) come to the Blue Ridge mountains; Elkton’s local Chevy Pontiac dealership closed last month, for instance. But business here seems to be great for Merck & Co., the pharmaceutical giant that produces vaccines and medicines in 31 plants in 25 countries. Merck’s sprawling Elkton factory consists of more than 80 buildings that are scattered throughout 1,330 acres out on Route 340 South, about a mile and a half from downtown. It may look nondescript, but this is one of the company’s most important manufacturing locations anywhere. (Just past the plant is a Deer Crossing sign that is riddled with bullet holes, a reminder that folks here in America’s Bible Belt take their guns seriously.)

Merck first set up shop in Elkton in 1941, and now employs some 700 people who make medicines aimed at treating all sorts of evils: HIV, river blindness, Parkinson’s Disease, high cholesterol, glaucoma, and simple pain. There is a $250 million expansion going on, which is expected to add 70 people, possibly many more, to Merck’s roughly $60 million Elkton payroll. The expansion will boost Merck’s production of Gardasil, a cervical cancer vaccine, and is already boosting the fortunes of a long list of workers — some local, others who have come from places like Greenville, South Carolina — who are engaged in the construction: electrical suppliers, painters, carpenters, and so on. If you are looking for a successful American manufacturing plant, this is it.

And if you are looking for an example of how slashing tariffs helps create American jobs by reducing unnecessary costs of production, come to Elkton. Merck pays no US tariffs on the imported raw materials it brings in here through a so-called Foreign Trade Zone. Merck depends upon its duty-free imported chemicals to make its medicines.

So why would Merck executives — the plant manager here in Elkton, Merck’s lobbyists in Washington, D.C., and even one of the company’s official spokeswoman in Merck’s New Jersey headquarters — refuse repeated requests to talk about their success story? If free trade works to enhance your company’s international competitiveness, why not spread the word?

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Thirty six percent of American college grads could not name all three branches of the U.S. government, according to a survey that was released last November by the Intercollegiate Studies Institute. The grads also flunked their basic economics. Asked about the role of international trade in a nation’s economy, only 47.5 percent of the graduates answered correctly that trade leads to “an increase in a nation’s productivity.” Twenty percent of those respondents said that they believed that trade “decreases a nation’s economic growth in the long term.” Joe College “appears to be economically illiterate,” concluded the Wilmington, Delaware-based non-profit organization that has been measuring US political and economic literacy since 1953.

If the American public is increasingly economically illiterate, what about some of the nation’s most prominent journalists who report the news that Americans rely upon to form their opinions? Journalists like CNN’s Lou Dobbs, and Louis Uchitelle, a veteran reporter at the New York Times. Recently, both Lou’s passed along uncritically to their respective journalistic audiences some PR spin that is part of an ongoing Buy American campaign sponsored by the United Steelworkers of America. It is not surprising, of course, that Lou Dobbs was happy to pass along the union’s spin without really checking it out. Buy American is what the tub-thumping cable television anchor sees as his journalistic market niche (even though he majored in economics at Harvard). But when a senior reporter for the New York Times, one of the world’s great newspapers, soberly informs his readers that the insular-looking Steelworkers have long “endorsed” free trade, and have not really fought imports of steel in recent decades, that’s another matter. Saying that the Steelworkers are not advocates of protectionism is perhaps the journalistic equivalent of reporting that boxer Mike Tyson has always been known for his sweet disposition.

Had either Dobbs or Uchitelle done what journalists are supposed to do — be skeptical of PR spin, dig a little to get the broader context, and for business reporters especially, understand the basic economics — they would have discovered that the story’s broader context illustrated the benefits of trade and investment to the US economy, not just the perceived downside.

Here’s the story, first as reported by the New York Times and CNN, and then the missing context that undermines it.

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