America's merchandise trade deficit shrank by more than one-fourth in March to $4.05 billion, the lowest level since June 1983, the Commerce Department reported Friday.

The government said the decline in the trade gap came as imports slowed by $1.1 billion and exports edged up by $0.4 billion.February's deficit topped out at a revised $5.5 billion, slightly higher than the Commerce Department's initial estimate. The gap in January was $7.2 billion.

The merchandise trade deficit - the difference between what the United States imports and what it sells abroad - is a key measure of U. S. competitiveness in the world market.

After peaking at $152 billion in 1987, the figure has spiralled slowly downward, and stood at about $101 billion in 1990. At an annual rate, the March $48.6 billion, while the three-month rate stood at $67.7 billion.

A Commerce Department spokesman noted that the March exports were buoyed by an increase in aircraft exports by $750 million and telecommunications, which were up by $250 million.

Also helping swell exports were increases in capital goods and motor vehicles and parts. Decreases in the export sector were reported for industrial supplies and materials, and food, feeds and beverages, while exports of consumer goods were nearly unchanged.

The change in imports, meanwhile, reflected declines in industrial supplies and materials, consumer goods and capital goods.

Other merchandise, including imports of food and drink were up, while imports of motor vehicles was unchanged, with a $400 million increase in automobile imports largely offset by declines in auto imports from other countries.