Exports outside the EU are now running well below last year's levels, according to the latest figure, with the strengthening euro adding to the difficulties of companies selling outside the euro zone.

The euro, which touched its launch level of $1.17 on Monday before slipping back, edged higher yesterday as hopes for a cut in euro-zone interest rates grew.

Exports outside the EU were €8.78 billion for the first quarter of this year, 6 per cent down on the same period last year, according to new figures from the Central Statistics Office. Exports to the US, the Republic's largest trading partner outside the EU, are down 3 per cent to €4.27 billion, while sales in Japan fell 19 per cent to €544 million.

Reflecting sluggish economic growth and the difficulties caused by the strong euro, exports to many other countries were also down. The only significant rises were in exports to Mexico, up 48 per cent to €189 million, and to Norway, up 34 per cent to €185 million.

Exports fell in most sectors, with computers down 16 per cent to €1.26 billion and organic chemicals falling 8 per cent to €2,803 million. The one major sector where exports increased was medical and pharmaceutical products, where sales outside the EU rose by 35 per cent to €893 million, continuing the trend of the past year during which exports from this sector have soared.

Weak consumer demand and falling production in many industrial sectors also led to a sharp drop in imports from non-EU countries. They were down 9 per cent in the January to March period compared to the same month last year.

The monthly figures suggest that the declining trends in both exports and imports may be accelerating. Exports in March at €2,650 million were 9 per cent lower than the same month last year, while imports at €1,427 million were down 14 per cent.

The euro yesterday slipped just slightly from Monday's highs on the foreign exchange markets. It was trading late yesterday in Europe at just over $1.16. While this was off the four-year high of $1.1738 reached on Monday, most forecasters believe that the trend in the dollar remains downwards and that the euro will touch new highs in the weeks ahead.

• The 12 members of the euro zone are demanding more control over their own economies, with a sharply reduced role for non-euro members such as Britain. The 12 have written to the European Convention to demand exclusive voting rights on issues such as budgetary co-ordination and the operation of the EU's stability pact in the single currency area. Mr Valéry Giscard d'Estaing will consider the four-point plan when his inner team, or praesidium, meets today at the start of a three-day private session to complete the first draft of a new EU constitution.  (Financial Times Service)