Countries once dominated fabrication of carbon steel (7,4)

I believe the answer is:

eastern bloc

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'countries once dominated fabrication' is the definition.
I know nothing about this answer so I can't tell whether it can be defined by this definition.

'of carbon steel' is the wordplay.
I cannot really see how this works, but
'of' could be 'o' and 'o' is located in the answer.
'carbon' could be 'c' (C is the chemical symbol for carbon) and 'c' is found within the answer.
This explanation may well be incorrect...

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I've seen this clue in The Telegraph.

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