ABSTRACT
At the end of the 1980s, even though Japanese direct investment in Europe still carried a minor weight in the European economy, 1 mounting protectionist pressures against Japanese investments started to emerge in the business community. This sounds partly like a reorchestration of the worries that were expressed in the US about the explosion of Japanese direct investment in the early 1980s. The concerns have been, however, more muted than in the US so far, partly because worries concerning Japanese investment are confined to a limited number of sectors in each individual country, but above all because of the recency of those investments. Actually, rather than the absolute level of these investments, it is probably both the speed at which they have advanced, the nature of the sectors in which Japanese are involved and the huge asymmetry in those flows between the two regions, which triggered such strong emotions. It must be remembered that Japan has been running a trade surplus with the EC for a number of years, as a result outward investment by Japanese MNCs was immediately regarded as another unfair means of invasion of the EC market. Be that as it may, the increased stake of Japanese investors in the European community has given rise to a heated debate about the risks and benefits of such foreign involvement on the host-economies.
