This chapter attempts to explain a preliminary and tentative way, external and internal factors in the Soviet and East European area’s hochkonjunktur of 1970-1975 and in the downswing and stagnation of the last seven years. It describes some of the main trends in East-West trade, comment on the competition between Eastern Europe and the newly industrializng nations in Western markets, and speculate on political aspects of Western restrictions on machinery exports to CMEA. Soviet and East European economic growth and trade have been affected, to an extent unprecedented since World War II, by the repurcussions of events that occured outside the CMEA area. The net indebtedness to commercial banks of Mexico, Brazil, and Argentina amounted to about $100 billion in 1980, or at least twice as much as the CMEA as a whole. Increasingly stringent NATO controls on strategic exports to CMEA members will encourage their inward-turning policy.