(TOKYO) - European Union Trade Commissioner Peter Mandelson on Monday urged Japan to open up to foreign investment, saying it was the most closed of the developed economies.

"For decades Japan has taken advantage of an open global investment climate. Yet at home it remains the most closed investment market in the developed world," he said in a speech here.

For every dollar Japan invested in Britain and the Netherlands alone in 2006, European companies were able to invest only three cents in Japan, he said.

"Japan is the only country in the developed world with which the EU has a negative balance of investment flows," Mandelson said during a visit by top EU officials including European Commission President Jose Manuel Barroso.

European companies "see huge potential in Japan and are frustrated by the difficulty of investing here," he said, pointing to restrictions on foreign direct investment as well as an under-developed merger and acquisition market.

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