A sharp drop in Canada’s exports of crude oil and natural gas helped pull the country’s trade surplus down to $4.0 billion in January from $5.2 billion in December, Statistics Canada said Friday.

Strong imports from countries outside North America also pushed the surplus down.

Overall, Canadian exports fell 1.6% from December to $35.9 billion, while imports rose 1.9% to $31.9 billion.

Falling prices for crude oil and natural gas in January were the main reason for the drop in exports. Energy exports decreased by 12.5% month-over-month to $5.9 billion.

Natural gas exports fell 16.7% to $2.5 billion, accounting for more than half of the drop, while crude oil exports fell by 11.3% to $2.2 billion.

Canada’s exports to the United States fell more than 2% to $29.5 billion, while imports from south of the border edged up 0.3%. Canada’s trade surplus with the United States slipped to $8.1 billion, down from $8.8 billion in December.

Canada’s trade deficit with countries other than the United States grew to $4.1 billion. Imports from other countries reached $10.5 billion in January, up from $9.9 billion in December.

Imports from both the European Union and Japan rose substantially, Statistics Canada said.

South of the border, the U.S. government reported that the trade deficit rose 4.5% to US$58.3 billion. Only theUS $59.4 billion trade gap seen in November was bigger.

Last year, the U.S. trade deficit grew more than 24% to $617.1 billion, a third straight annual record. Economists believe another record will be set in 2005 due to higher prices for imported oil and consumer demand for imported goods.