PARIS -- It's the kind of saber-rattling which, had it happened a few years ago, might have spurred talk of a "fortress Europe" ready to erect tough barriers against Japanese trade and investment.

With the European Community's 12 member states negotiating a way to slowly lift quotas on Japanese cars, Peugeot S.A. Chairman Jacques Calvet chose the opening of the Paris auto show last month to launch a blistering attack against countries he sees as knuckling under to Tokyo.

The French auto chief took a bitter swipe at the London-led free-trade camp, calling Great Britain a "Japanese aircraft carrier just off the coast of Europe, or maybe even Japan's fifth major island."

One day later, the heads of Italian automaker Fiat SpA and German automaker Volkswagen AG expressed sympathy for Calvet's demand for a halt to all trade talks. Even EC Commission President Jacques Delors raised the Japanophobe flag when he said, "One must be aggressive with the Japanese, within the limits of courtesy."

Five years ago, that sort of talk from Europe's most powerful industrialists might have fueled fears of an EC ready to turn protectionist against Tokyo. Not any longer. While battles over specific industries still draw tempers in Brussels, even the most instinctively protectionist EC states have moved slowly to embrace Japanese money and goods over the past half-decade.

"Frankly, Delors's remark was stupid," said an official in the EC division handling trade negotiations as well as the present auto talks. "The French feel they can't meet the competition and think if we close their markets for 10 years they will survive. But we just can't have that."

The logic of the EC's single-market project -- under which frontiers between EC states will disappear by 1993 -- has been the guiding factor behind this slow change of heart. Even Europe's most vociferous protectionists realize that the Japanese goods they keep out of their own states will soon be able to enter through other EC countries, once borders are brought down.

"There are still aftertastes of the general protectionist spirit in France, Italy and other countries -- but it is much weaker than six or seven years ago," said Zafer Achi, a partner with the U.S. consulting firm McKinsey & Co. He predicted there will be "one or two cases a year" of Japanese-European dispute "that will be subject to considerable public debate." But he said they will be limited to specific industries, like high-definition television or video equipment.

Feuding Remains However far the Europeans have come toward accepting things Japanese, Calvet's remarks show just how bitter inter-EC feuding can still get.

At issue in the auto talks is how the EC will gradually lift a ragbag of quotas in Britain, France, Italy, Spain and Portugal that keep Japan's present share of the European car market at just under 10 percent. Britain, Germany and the Benelux countries are pushing to let the foreign cars in quickly, while France, Italy and the Iberian states want them kept out as long as possible.

To some extent, it's just a question of whose industries stand to lose most to Japanese vehicles. French carmakers Peugeot and Renault as well as Italian automaker Fiat gain most of their profits from the sales of small cars in well-protected home markets. They, as well as Spain and Portugal -- home to plants for the French and Italian producers -- are most vulnerable to Japanese autos.

Britain, home to car plants for Japanese automakers Honda Motor Co., Nissan Motor Co. and Toyota Motor Corp., wants barriers as low as possible, as well as EC consideration of cars made on its island as "European," even if the producers are Japanese. This would mean they won't be covered by quotas. And the German carmakers, with their large export markets and high technology, feel less threatened by the Japanese.

"When it comes to the auto sector, it's obvious the French have been extremely hostile," the EC official said. "They just feel they can't meet the competition."

But EC officials and analysts say the auto debate goes beyond narrow interests, touching deep economic conceptions as well as cultural attitudes toward trade and investment that have divided the 12 member states for years and may spawn acrimony in the future.

British Prime Minister Margaret Thatcher's government has long been the EC's most vociferous free-trade advocate, championing the EC's single-market project as a chance to implant her brand of laissez-faire conservatism -- liberalism, in European parlance -- on continental Europe. She has also courted foreign investment -- particularly Japanese -- as a way of bring technology and jobs to her nation, which has the smallest manufacturing sector of any industrial country.

The policy has paid off. Thatcher's hospitality, as well as Britain's use of English -- the Japanese's preferred foreign language -- have garnered it between one-third and one-half of Japanese money invested in the EC over the past decade.

"Among the 12, Great Britain is the first choice for investment, and the reasons are the attitude of the British, as well as the language problem," said Masame Ayabe, commercial attache' at the Japanese Embassy in Paris. "Great Britain is pushing for the free circulation of automobiles, because if there is a problem, it will halt investment."

Germany's View Germany also leans toward the free-trade view, but for different reasons. It is one of the world's largest exporting nations and, on the production side, German productivity and technology are strong enough to meet the Japanese challenge.

Belgium, the Netherlands and Luxembourg, whose economies are tightly linked to Germany's, tend to swing behind Bonn on most trade issues. Poorer EC states like Ireland, Spain, Portugal and Greece tend to support a free-trade regime in the hope of garnering foreign direct investment, although the Iberian states sometimes go protectionist when their own low-technology comparative advantages may be threatened.

This leaves France and Italy as the two most vociferous proponents of protection against Japan. Both of their industries have relied in the past on well-shielded domestic markets for profits.

"It is clear that a country like the United Kingdom has always been in favor of free trade -- in the whole of history it has been a country of sailors and merchants, as has been Holland and Denmark," said Michel Galiana-Mingot, president of Sony France. "On the contrary, France has been a nation of farmers, whose only dream is of protecting their fields."

While the auto debate's outcome may set the stage for future sector-specific disputes, many say it is just a battle in a war that has already been won by the free traders.

Japanese firms have gained tremendous market share in a range of important industries over the past 10 years. And Japan's direct investment in Europe has grown dramatically, to an estimated $13.9 billion last year from $3.3 billion in 1986.

With the economic unification of Europe in 1992, protectionist nations have realized any investments or goods they restrict will enter the EC through other, more liberal EC states. That means others will gain the employment, technology and other benefits brought by Japanese money and goods -- a point even the French recognize.

"In the past France was not a very welcoming country for Japanese investment, but this has changed quite a bit," Galiana-Mingot said, the auto issue aside.

"Sony, Akai and Canon all have a developing presence, and the government has not put obstacles to their growth," consultant Achi said. "If {the Japanese firms} had tried to do that in the late 1970s or early 1980s, it would have been impossible."

While the trend is toward removing barriers, several issues may pose problems for Euro-Japanese relations over the next few years. The two trading partners formed a working group this year to try to find ways to open Japanese markets to European goods and gain a "better balance" in investment and trade.

From the Japanese point of view, the car dispute may shape Japanese attitudes toward Europe, depending on how the giant industry is treated. Restrictions on semiconductors may lead to another round of vociferous sword-rattling.

"If you exclude these two domains, what large investments can you have in this country?" Ayabe asked. "Only small factories and restaurants."