Recall from Chapters 5 and 6 that theoretically. there economic gains when firms from different countries can freely trade and engage in foreign direct in vestment(FDI). However. until the end of World War II. most governments had not accepted these insights In the late 1920s and the early 1930s. virtually all governments tried to protect domestic industries by imposing protection policies through tariffs and quotas. Collectively. these beggar-thv-neighbor policies triggered retaliation that further restricted trade(Figure 8.1). Eventually. trade wars turned into World War II. The postwar urge for global economic integration grew out of the painful lessons of the 1920 and the 1930s. While emphasizing economic benefits global economic integration is political in nature. Its most fundamental goal is to promote peace Table 8.1. Simply put. buyers and sellers are usually reluctant to fight or kill each other. On the other hand. in 1941. When the United States cut off oil sales to Japan(in protest of its aggression in China) Japan attacked Pearl Harbor. Global economic integration seeks to build confidence.