* Canada exports down 1.6 percent, imports off 3.2 percent
* Exporters struggling with uncertain markets, strong C$
OTTAWA, July 3 (Reuters) - Canada's trade deficit shrank by almost 70 percent in May from April but only because imports fell twice as fast as exports did, Statistics Canada said in a downbeat report on Wednesday.
The trade deficit - the 17th in a row - dropped to C$303 million ($289 million) in May from an upwardly revised C$951 million in April. Analysts had predicted a shortfall of C$730 million.
The data indicates exporters are still struggling to cope with uncertain foreign markets and a strong Canadian dollar while lower imports reflect a sluggish domestic economy.
Exports dropped by 1.6 percent as metal and non-metallic mineral products dropped by 15.0 percent while motor vehicles and parts fell by 3.8 percent.
After four consecutive monthly increases imports slumped by 3.2 percent on lower shipments of energy products, which dropped by 18.4 percent, as well as metal ores and non-metallic minerals.
Exports to the United States, which encompass 74.2 percent of all Canadian exports in May, fell 1.6 percent, while imports dropped by 2.0 percent - the first such decline in five months. As a result the trade surplus with the United States edged up to C$3.45 billion from C$3.41 billion in March.