Abstract This paper examines the design of the foreign trade institutions of centrally planned economies and the foreign trade policies followed by the Soviet Union and East Europe. At the microlevel, the design of the trade system is seen as fostering considerable opportunities for corruption and rent seeking. At a mesolevel, the objective of the trade system is seen as the protection of capital at the expense of land and labor, to the benefit of the Communist Party. At the macrolevel the political economy of CMEA trade is examined. The paper closes by examining the impact of trade flows on the distribution of political power in these economies.