glossary on trade financing terms e

E Earning per share: This measures a company's total net return earned on ordinary share capital It is calculated by deducting taxation, depreciation, interest charges and payments to preference shareholders and other minority interests from gross income The result is then divided by the number of ordinary shares Franỗais: Bộnộfice par action Espol: Utilidades por acción, ingresos por acción Earning power: This refers to a company’s profitability, i.e its capacity to return a profit or income It is measured in terms of the profit generated during a certain period of time in relation to the capital employed More narrowly defined, it is represented by the ratio between the net profit generated and the capital resources employed Franỗais: Capacitộ bộnộficiaire Espaủol: Rentabilidad Earnings: A technical accounting term, referring to the amount of profit (usually for a year) available to the ordinary shareholders (UK) /common stockholders (US), i.e the profit available once all expenses (operating expenses, interest charges, taxes and dividends on preferred stock) have been deducted from the gross revenue The term earnings is sometimes used to describe income, net income, profit or net profit Franỗais: Bộnộfices, Gains Espaủol: Ganancias, beneficios, utilidades, ingresos Earnings yield: Earnings per share divided by stock price Franỗais: Rendement du bộnộfice Espaủol: Dividendo por acciún ECA: Abbreviation for Export Credit Agency Franỗais: ACE Espaủol: ECA E-commerce: Electronic commerce can be both: (1) the on-line ordering, payment and delivery of intangible goods and services (Direct e-commerce); (2) the electronic ordering of tangible goods, which must still be physically delivered, using traditional channels such as postal services or commercial couriers Payment is made either physically or electronically (Indirect e-commerce) Franỗais: Commerce ộlectronique Espaủol: Comercio electrúnico Economic growth: The increase in a country’s output of goods and services, i.e a larger GNP, during a period of time When economic growth exceeds population growth, the country's living standards should rise Such a development is generally due to better utilization of the country's economic resources Franỗais: Croissance ộconomique Espaủol: Crecimiento econúmico ECP: Abbreviation for Eurocommercial paper Franỗais: ECP Espaủol: ECP ECU: Abbreviation for European Currency Unit Franỗais: UME Espaủol: ECU ECU bonds: Eurobonds denominated in ECUs Franỗais: Obligations en ECU Espaủol: ECU bonds ECU notes: Euronotes denominated in ECUs Franỗais: Eurodettes Espaủol: ECU notes EFT: Abbreviation for Electronic Funds Transfer Franỗais: EFT Espaủol: EFT Effective Yield: See Yield Franỗais: Rendement effectif Español: Rendimiento efectivo Electronic banking: Refers to the provision of retail and small value banking products and services through electronic channels Two fundamental aspects of electronic banking are: (1) the nature of the delivery channels - "closed networks" which restrict access to members, and "open networks" which have no membership requirements; (2) the means of customer access to these channels - including point-of-sale (POS) terminals, automatic teller machines (ATM), telephones, personal computers, smart cards etc Internet banking - also known as e-mail banking or virtual banking - is the latest form of electronic banking Access to the service for the customer is provided via personal computers, communicator phones and other devices with access to the Internet Franỗais: Electronique bancaire Espaủol: Operación bancaria electrónica Electronic funds transfer: The transfer of funds, other than a transaction originated by cheque, draft or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, computer or magnetic tape, so as to order, instruct or authorize a financial institution to debit or credit an account Franỗais: Transfert ộlectronique de fonds Espaủol: Transferencia electrúnica de fondos Electronic money: Refers to "stored value" or prepaid payment mechanisms for executing payments via point-of-sale (POS) terminals, direct transfers between two devices or over open computer networks such as the Internet Stored value cards can be "single-purpose" cards, used to purchase one type of goods or service or products from one vendor, or "multi-purpose" cards, used for a variety of purchases from several vendors Franỗais: Monnaie ộlectronique Espaủol: Dinero electrónico Endorsee: The person or corporate body to whom the title and/or rights of a negotiable instrument are transferred from the endorser, by means of the latter's signature Franỗais: Endossataire Español: Endosatario, portador, tenedor por endoso Endorsement: The only method recognized in commercial law of transferring title and/or rights on a negotiable instrument The transfer is achieved by writing one's name on the instrument, usually on the reverse The signature must be accompanied by conditional or restrictive wording and constitutes a contract between the holder and all parties to such an instrument Franỗais: Endossement Espaủol: Endoso Endorser: The person or corporate body, with title and/or rights to a negotiable instrument, who writes his name on it in order to transfer the said title or rights to another person or body Franỗais: Endosseur Espaủol: Endosante, cedente Endowment capital: Seed or start up capital made available to either a public or private company, by the government or by the company’s holding company respectively Franỗais: Dotation en capital Espaủol: Dotaciún de capital EPC contract: A contractual agreement between the client (i.e the owning company which has issued the contract) and the contractor, which outlines the terms of the contractor's responsibility for the Engineering, Procurement and Construction (EPC) activities linked to the project Franỗais: Contract EPC Espol: Contrato de ingeniería, adquisición y construcción Equivalent bond yield: The annual yield on a short-term, non-interest-bearing security calculated so as to be comparable with yields on coupon securities Franỗais: Rendement obligataire ộquivalent Espaủol: Rendimiento equivalente al de los bonos Equity: The part of a company's capital belonging to its shareholders In accounting terms, equity is what is left when all the company's liabilities have been deducted from its assets, except for those liabilities due to shareholders The value of equity of a quoted company corresponds to the price per share multiplied by the number of shares Franỗais: Actif net Espol: Participación de beneficios Escrow accounts: Accounts held in Offshore banks, outside the country of a debtor, through which a portion of his export revenues are channelled in order to cover future debt-service payments The beneficiaries of the escrow accounts are the creditors who will obtain extra security for their loans and priority in debt service Franỗais: Comptes de dépơt Espol: Cuenta de garantía bloqueada, cuenta de depósito en garantía Euro: A new currency introduced January 1999 between 11 member states of the European Union (Italy, France, Germany, Spain, Portugal, Austria, Finland, Belgium, Luxembourg and The Netherlands) as the final step in the process leading to full Economic and Monetary Union (EMU) within the EU The Euro will gradually replace the use of the national currencies and will become the only currency in circulation within the EU by July 2002 The parity Euro-ECUhas been set at one-to-one Franỗais: Euro Espaủol: Euro Euro Lines: Lines of credit granted by international banks in Eurocurrencies Franỗais: Lignes of credit Espol: Eurolíneas Eurobond: A Bond issued by a company or a government in a market other than that of its currency of denomination Eurobonds are then sold internationally and not in just one domestic market (e.g a German corporation may issue euro-dollar bonds on the London capital market) The main eurobonds include the Eurodeutsche Mark bonds, Eurodollar bonds, Eurofrench Franc bonds, Eurosterling bonds and Euroyen bonds, although the nationally denominated European eurobonds will be phased out within Europe Franỗais: Euro-obligation Español: Eurobono Eurocapital market: The section of the Euromarkets where transactions with medium- to long-term maturities are conducted, mainly in the form of Eurobond Franỗais: Marchộ des Euro-capitaux Espaủol: Euromercado de capitales EuroCDs (Certificate of deposit): CDs issued by a non resident bank in a Euro currency Franỗais: EuroCD (certificat de Dépơt) Espol: Eurocertificado de depósito Eurocommercial paper: Abbreviated as ECP or Euro-CP It indicates short-term money market paper issued by major firstclass companies on the Euromarket, usually without necessarily being underwritten by the lead issuing bank Franỗais: Euro-effet commercial Español: Efecto comercial en eurodivisas Eurocredit: An international bank credit denominated in a Eurocurrency, i.e denominated in a currency other than the domestic currency of the bank granting the loan Eurocredits may be provided to governments and corporations and usually have a variable interest rate charge, which is adjusted every few months Large loans are handled by syndicates of banks Franỗais: Eurocrộdit Espaủol: Eurocrộdito Eurocurrency: A currency which is banked outside its country of origin The main Eurocurrencies include the Eurodollar, the Euro-FF, the Euro-DM, the Euro-£, the Euro-guilder, etc Franỗais: Euromonnaie Espaủol: Eurodivisa Eurocurrency market: A money market, based mainly in Europe, engaged in the lending and borrowing of Eurocurrencies to finance international trade and investment projects The main financial instrument used in the Eurocurrency market for long-term investment purposes is the Eurobond Depositors in the Eurocurrency market include commercial banks, industrial companies and Central Banks Borrowers are typically companies, which resorted to Eurofinance during times of domestic credit restrictions and/or when domestic interest rates were higher than those prevailing in the Eurocurrency market Franỗais: Marchộ des Euromonnaies Espaủol: Mercado de eurodivisas Eurodollars: U.S Dollar-denominated deposits held in banks and other financial institutions outside the United States Although the majority of such deposits are held in Western Europe (thus leading to the "Euro" denomination), they are not limited to this area Franỗais: Eurodollars Espaủol: Eurodúlar Eurodollar bonds: Eurobonds denominated in dollars Franỗais: Obligations en Eurodollar Espaủol: Eurodollar bonds Euroequity market: The market for shares sold outside of their country of origin Franỗais: Marchộ des Euro-actions Espaủol: Mercado de euroacciones Euromarket: An international financial market consisting of several specialized markets (such as the Eurobond and the Eurocurrency markets) on which bank loans and bond issues are transacted in Eurocurrencies Although its name refers to Europe, the Euromarket is by no means confined to it geographically but is organized world-wide Franỗais: Euromarché Español: Euromercado Euromoney market: The part of the Euromarket where transactions involving short- to medium-term placements (i.e not exceeding 18 months) are conducted, primarily in the form of time deposits Franỗais: Euromarchộ de largent Espaủol: Euromercado del dinero Euronotes: Medium-term notes issued on the Euromoney market Franỗais: Europapier Espaủol: Europagaré European Bank for Reconstruction and Development (EBRD): A London based financial institution which began its operations in June 1991 It provides financial assistance to facilitate the transition to market economies and to promote private and entrepreneurial initiatives in Central and Eastern Europe Franỗais: Banque Europộenne pour la Reconstruction et le Développement Espol: Banco Europeo de Reconstrucción y Desarrollo European Currency Unit (ECU): This was introduced in 1979 with the coming into effect of the European Monetary System (EMS) The ECU is based on a basket of European currencies and its value is equal to the sum of the values of the EC currencies included in the reference basket Franỗais: Unité Monétaire Européenne Español: Unidad Monetaria Europea European Free Trade Association (EFTA): A regional organization, established in December 1960 by the Stockholm Convention as an alternative to the European Economic Community, designed to provide a free trade area for industrial products among member countries Unlike the EEC, however, EFTA members did not set up a common external tariff and did not fully liberalise agricultural trade EFTA currently has four members: Iceland, Liechtenstein, Norway and Switzerland Other members such as the U.K., Denmark, Portugal, Sweden, Finland and Austria left EFTA when they joined the EC Franỗais: Association Europộenne de Libre Echange (AELE) Espol: Asociación Europea de Libre Comercio European Investment Bank (EIB): An independent public institution set up by the Treaty of Rome of 1957 with the mission of contributing to the steady and balanced development of the European Union (EU) The members of the EIB are the EU Member States, who have all subscribed to the Bank's capital The EIB provides companies and public institutions with long-term finance for specific capital projects; typically regional and structural development projects with cross-border effects The EIB collaborates closely with the banking community, both when borrowing on the capital markets and when financing capital projects It also undertakes activities outside the European Union, either out of its own resources or under mandate of the EU or the Member States Franỗais: Banque Europộenne dInvestissement (BEI) Espol: Banco Europeo de Inversión (BEI) European Monetary System (EMS): A co-operative foreign exchange arrangement set up in 1979 and involving most of the members of the European Community, designed to promote exchange rate stability within the EC By requiring participants to maintain their exchange rates within set fluctuation margins, the EMS was intended to move Europe toward closer economic integration and to avoid disruption to trade resulting from excessive exchange rate swings Franỗais: Systốme monộtaire europộen (SME) Espaủol: Sistema Monetario Europeo (SME) European Monetary Union (EMU): The final stage of the process of macro-economic integration at the European Union level European countries participating in the EMU are required to hand over the conduct of their monetary policy to a single European Central Bank and to respect stringent guidelines on government spending (the so called Stability Pact) The most apparent aspect of the EMU is the introduction and gradual switchover to a single currency, the Euro Franỗais: Union monộtaire europộenne (UME) Espol: Unión Monetaria Europea (UME) European option: An option which can only be exercised at its expiry date Compare with an American option Franỗais: Option europộenne Espaủol: Opciún europea European terms: The quotation of a foreign currency on an indirect basis See also indirect quote Franỗais: Termes europộens Espaủol: Términos europeos Euro-Treasuries: A security on the Eurobond market entitling the holder to buy a particular US Treasury bond at a fixed price, at any point within a given period of time Franỗais: Euro Bons du Trộsor Espaủol: Eurobonos de tesorería Exchange: The marketplace within which shares, options and futures on stocks, bonds, commodities and indices are traded Some of the main world exchanges include the New York Stock Exchange (NYSE), the National Association of Securities Dealers Automatic Quotation System (NASDAQ), the LIFFE, etc Franỗais: Echange Espaủol: Bolsa, bolsa de valores Exchange permit: A government permit sometimes required in order to convert domestic currency into a foreign currency, for payment of international transactions Franỗais: Permis de change Espaủol: Permiso de cambio de divisas Exchange controls: Restrictions applied by a government (or the Central Bank) to limit the convertibility of the local currency into foreign currencies Franỗais: Contrụle des changes Espaủol: Control de cambios, control cambiario, intervención de los cambios Exchange rate: The price at which one currency can be converted into another On foreign exchange markets there are two reference exchange rates: the Bid rate (at which operators are willing to buy the currency in exchange for another) and theasked rate (at which they are willing to sell the currency against another) Freely traded currencies also have a spot rate for immediate exchange and a forward rate for exchanges to be carried out at some future date Franỗais: Taux de change Español: Tipo de cambio Exchange risk coverage: A general term for financial techniques (such as insurance, swaps, forwards etc.) intended to cover (protect) the enterprise from adverse variations in the exchange rate (e.g from the depreciation of the currency of denomination of a credit) Franỗais: Couverture du risque de change Español: Cobertura de los riesgos cambiarios, cobertura de los riesgos de fluctuación de los tipos de cambio Ex dividend: i.e without dividend A share sold "ex div" does not entitle the purchaser to the forthcoming dividend payment Opposite: Cum div Franỗais: Ex-dividende Espaủol: Sin dividendo Ex: i.e "from" When used in pricing terms such as "ex factory" or "ex dock" it indicates that the quoted price refers to the goods at their point of origin (in the examples, respectively at the seller's factory or the export dock) In practice, this kind of quotation indicates that the goods are made available to the buyer at a specified place within a fixed period time Franỗais: Ex Espaủol: Ex Exercise price: See Strike price Franỗais: Prix d'exercice Espaủol: Exercise price EXIMBANK: See Export-Import Banks Franỗais: EXIMBANK Espaủol: EXIMBANK Exotics: Derivatives which are either complex and sophisticated or are available in emerging economies They contrast with "plain vanilla" derivatives, which relate to standard commodities in industrialised countries which are relatively simple Franỗais: Exotiques Español: Complejo Expiration date: The time when the contract ceases to exist In the case of a letter of credit, it indicates the last date upon which draft(s) may be presented for negotiation When referring to an option this is the last day (on an American basis) or the only day (on a European basis) on which the option may be exercised Franỗais: Date d'ộchộance Espaủol: Fecha de vencimiento, fecha de caducidad Export Administration Regulations: Regulations which provide specific instructions as to the type of export licenses required, their use and the goods under export control Franỗais: Rốglements administratifs d'exportation Espol: Reglamentación para la gestión de las exportaciones Export Broker: An individual, or a firm, who brings together international buyers and sellers for a fee, without however taking part in the actual sales transactions Franỗais: Courtier l'exportation Espaủol: Agente de exportaciones Export Control Classification Number (ECCN): A number assigned to every product on the Commerce Control List The ECCN consists of a fivecharacter number which identifies the category, product group, strategic level of control and country group level of control Franỗais: Numộro de classification de contrụle l'exportation Espaủol: Número de clasificación para el control de las exportaciones Export credit: A term covering different export financing facilities ensuring the availability of credit to the exporter at an acceptable rate of interest Such facilities are usually intended to meet the exporter's pre/post shipment credit requirements and include the refinancing of suppliers/buyers' credit Franỗais: Crộdit l'exportation Espaủol: Crộdito a la exportación Export Credit Agency (ECA): A governmental, semi-governmental or private agency established with the aim of facilitating exports through the provision of insurance, guarantees and/or funding or funding support Franỗais: Agence de crédit l'exportation Español: Organismo de crédito a la exportación (OCE) Export Credit Enhanced Leverage (EXCEL): A programme developed in 1990 by the World Bank in conjunction with a working group of the International Union of Credit and Investment Insurers (the Berne Union) The programme’s goal is to provide export credits at Consensusrates to private sector borrowers in highly indebted countries, which would be a too great a risk for most agencies to take on Franỗais: Export Credit Enhanced Leverage (EXCEL) Español: Programa de Fomento del Crédito a la Exportación (EXCEL) Export credit guarantee: A guarantee issued by a financial institution (frequently a government agency) especially set up to safeguard export-financing banks against losses resulting from the export transactions they finance It therefore facilitates exporters' access to pre/post shipment credit from a banking institution and is thus a powerful incentive to exporting It should be noted that export credit guarantees not involve the actual provision of funds to exporters Franỗais: Garantie de crộdit l'exportation Espaủol: Garantớa de crédito a la exportación Export credit insurance: A policy to cover some of the riskier areas faced by exporters i.e non- payment due either to insolvency of the importer (commercial risk) or political events (political risk) Export credit insurance is frequently mentioned in connection with export credit guarantees While guarantees cover bank export loans, insurance policies are issued directly in favour of the exporters In many developing countries this type of insurance is either not available or is too expensive Several types of export credit insurance are available These differ from country to country according to the needs of the local business community The most widely used types of export credit insurance include the following: (1) Short-term export credit insurance: generally covers credit periods not exceeding 180 days Preshipment and post-shipment export stages are covered and protection may be provided against political and commercial risks (2) Medium- and long-term export credit insurance: issued for credits extending for periods over 12 months It provides cover for exports of capital goods, construction or special services (3) Investment insurance: issued to companies investing in foreign countries The Multilateral Investment Guarantee Agency (MIGA), affiliated to the World Bank, offers this type of insurance (4) External trade insurance: applies to goods not shipped from the originating country It is not available in a number of developing countries (5) Exchange risk insurance: covers losses arising from the fluctuation of the respective exchange rates of the importer's and exporter's national currencies over a determined period of time Franỗais: Garantie de crộdit l'exportation; Assurance de crộdit l'exportation Espol: Seguro de crédito a la exportación Export credit linked swaps: The difference between the market interest rates of a specific currency and the minimum interest matrix rates prescribed under the OECD's Arrangement on Guidelines for Officially Supported Export Credits (the Consensus) may be used to reduce the costs of financing a transaction The currency usually used for such export credits is the dollar Under this technique, the export credit is extended in the normal way and the official agency subsidizes it, to bring the cost of credit into line with the Consensus minima In a separate transaction, a swap is arranged to transfer the subsidy element from the dollar credit into another currency and thus reduce the cost of funds to the borrower The differential between the Consensus rates and market rates will determine the reduction in the costs of financing Franỗais: Swaps liộs des crộdits l'exportation Espol: Swap para crédito a la exportación Export declaration: Also known as the shipper's export declaration (SED), this is a document describing the complete particulars of a specific shipment It is required by the Department of Commerce in order to control exports and for statistical purposes Franỗais: Dộclaration d'exportation Espol: Declaración de expedición del cargador Export financing: The extension to exporters of the funds required to carry out the export of merchandise or for the rendering of services, such as construction, engineering and development projects in a foreign country Export financing usually takes the form of a bank credit granted directly to the exporter or of a credit extended to foreign importer An important role in short-term export financing is played by documentary credit Franỗais: Financement l'exportation Espol: Financiación de exportaciones Export-Import banks (EXIMBANKS): These are banks specialised in lending to support international trade transactions They are created to support the development of exports and to satisfy the financial needs of exporters and importers, as well as of investors in foreign markets This is achieved by supplementing and fostering the financing of their country's foreign trade by commercial banks and other private institutions Eximbanks offer four major export finance support programmes: loans (pre-shipment and postshipment financing), guarantees, working capital guarantees and insurance The Export-Import bank of the United States is the ECA of the United States Franỗais: Banques d'export-import Espol: Banco de exportación e importación Export license: A government document allowing the "licensee" to engage in the export of specific goods in determined quantities to a particular destination Some countries may require this document for most or all exports, while others will ask for it only under special circumstances Franỗais: Licence d'exportation Espaủol: Licencia de exportaciún Export Management Company (EMC): A private firm which buys merchandise from domestic manufacturers for international distribution or which sometimes acts as an agent for manufacturers It may act as the export department for many different manufacturers, soliciting and transacting export business on their behalf in return for a commission, salary or retainer Franỗais: Sociộtộ de gestion des exportations Espaủol: Compaủớa de gestión de exportaciones Export merchant: A company which buys products directly from the manufacturers and then packages and adds its brand to them, for resale under its own name Franỗais: Exportateur Español: Negociante exportador Export oriented strategy: An economic strategy assigning a key role to the production of goods for export as a means of encouraging the development of the domestic industry Compare with import substitution Franỗais: Stratộgie orientộe l'exportation Español: Export oriented strategy Export Processing Zone (EPZ): Industrial parks, designated by a government to provide tax and other incentives to firms, located within the parks, which manufacture exclusively for the export market Franỗais: Zones de traitement des exportations Espol: Zona franca industrial, zona de elaboración (de productos) para la exportación Export quotas: Restrictions or target objectives imposed by the government of the exporting country on the value or volume of exports of specified goods Such restrictions may be intended to protect domestic producers and consumers from temporary shortages of certain materials, or as a means of moderating world prices of specified commodities Franỗais: Quotas l'export Espaủol: Continente de exportación Export risk guarantee: A safeguard against potential claims arising from export operations Franỗais: Garantie de risque l'exportation Espol: Garantía contra los riesgos de exportación Export subsidies: These usually take the form of direct government payments or other economic incentives to domestic producers of goods sold on foreign markets The General Agreement on Tariffs and Trade (GATT) has imposed restrictions on the extension of such subsidies, in view of their potential to distort trade, unduly disturb normal commercial competition and hinder the achievement of the GATT fair trade objectives Franỗais: Subventions l'exportation Espaủol: Subvenciones a la exportaciún Export tariff: A tax on goods exported from a country Franỗais: Tarif d'exportation Espaủol: Derechos de exportaciún, arancel de exportaciún Export trading company: A company which is legally allowed to become involved in international trade Franỗais: Sociộtộ commerciale d'exportation Espaủol: Sociedad exportadora Exposure: The total amount of outstanding credit owed by a borrower or a country Franỗais: Encours Espaủol: Prộstamos pendientes (Country) exposure: the amount of outstanding credit extended towards a specific country by a bank, group of banks or export credit agencies, including commitments, arrears and unrecovered claims It is thus a measure of the possible total financial cost to the agency in case of default by the borrowing country Franỗais: Encours d'un pays Espaủol: Prộstamos pendientes por paớs Expropriation risk: See Political risk Franỗais: Risque dexpropriation Espaủol: Riesgo de expropiación Extended fund facilities: A special fund of the International Monetary Fund (IMF), available to assist members who need to undertake structural adjustments programmes The facilities take the form of medium-term loans and are granted to countries qualifying for support These countries may draw from the facility in tranches, where the availability of each tranche depends on the achievement of certain economic targets agreed in advance with the IMF Franỗais: Facilitộs de financement ộtendues Espaủol: Servicio ampliado del Fondo Extension: An additional period which may be granted by the drawer for payment of a draft when the drawee is unable or unwilling to make the due payment at the agreed maturity date Franỗais: Prolongation Espaủol: Prúrroga, prolongaciún Ex works (EXW): This stands for "at a named point of origin" (e.g ex factory, ex mill, ex warehouse) Under this term, the quoted price refers to the goods at the point of origin only and the seller agrees to place the goods at the disposal of the buyer at the specified place, on the date or within the period fixed All other charges are to the account of the buyer Franỗais: Ex works (EXW) Español: Franco fábrica ... Eurodettes Español: ECU notes EFT: Abbreviation for Electronic Funds Transfer Franỗais: EFT Espaủol: EFT Effective Yield: See Yield Franỗais: Rendement effectif Español: Rendimiento efectivo Electronic... of the European Monetary System (EMS) The ECU is based on a basket of European currencies and its value is equal to the sum of the values of the EC currencies included in the reference basket Franỗais:... Unitộ Monộtaire Europộenne Espaủol: Unidad Monetaria Europea European Free Trade Association (EFTA): A regional organization, established in December 1960 by the Stockholm Convention as an alternative