WASHINGTON — The United States on Monday eased economic sanctions against North Korea after almost 50 years, further lowering the barriers between the reclusive Stalinist state and the international community.

The move implements an announcement made by President Clinton last September and is aimed at improving relations between the nations while encouraging North Korea to refrain from testing long-range missiles.

Trade of most goods between the countries is now allowed, as are direct personal and commercial financial transactions, investments, shipping cargo and commercial flights.

While U.S. citizens will still require a license from the Treasury Department to do business with North Korea, under the new rules permission will be much easier to obtain.

North Korea announced Tuesday that its economy expanded 6.2 percent in 1999, the first growth in nine years and a rate that officials said was sustainable.

Officials at Seoul's central Bank of Korea said the easing of U.S. economic sanctions against Pyongyang and the expected increase in South Korean investment would positively affect the North's economy.

The American Chamber of Commerce in South Korea said Tuesday it was planning to take a business trip to North Korea.

It's just waiting for an invitation.

"We have a group of people interested . . . but you have to have an invitation first," said Jeffrey Jones, president of the American Chamber of Commerce in South Korea.

Meanwhile, South Korea said Tuesday, in the latest gesture aimed at easing tension with the north, that it has canceled a massive military parade and battle-scene re-enactments to commemorate the 50th anniversary of the outbreak of the Korean War.

"These measures are supported by our close allies in the region and are part of the process of close coordination between the United States, Japan and South Korea recommended by former Secretary of Defense William Perry," Clinton said in a statement.

"We will continue to build on these efforts and on the recent North-South summit to achieve additional progress in addressing our common (weapons) proliferation concerns," he added.

State Department spokesman Richard Boucher told reporters at a briefing the easing of sanctions would allow most imports and exports of nonsensitive consumer goods.

"Also permitted in the easing are direct financial transfer from one person to another, such as from a family in the United States to family members in North Korea or for legitimate commercial purposes," he added.

Restrictions associated with North Korea's designation by the United States as a terrorist-supporting state remain in place. That means exporting military goods and sensitive technology is still not allowed and companies will not be able to secure help from the Export-Import Bank to facilitate trade with North Korea.

The changes were published Monday in the Federal Register, the official publication of U.S. government proceedings, and came just days after a historic summit between leaders of North and South Korea and less than a week ahead of June 25, the 50th anniversary of the Korean War.

Reduced tension on peninsula

South Korean President Kim Dae-jung and North Korean leader Kim Jong-il agreed last week to reduce tensions on the divided peninsula and to hold reunions of families torn apart when the Korean War broke out 50 years ago.

Clinton's decision followed a moratorium by North Korea on its missile-testing program and cooperation with the United States on a broad range of issues that Washington says could result in normalized relations.

North Korea's test-firing of a missile over Japan in August 1998 indicated that it had ended the big powers' monopoly on long-range missiles and helped prompt the United States to begin setting up a defensive shield to protect against any such attacks.

"It is our understanding and expectation that North Korea will continue to refrain from testing any long-range missiles for the duration of our negotiations that are aimed at improving our relations," Boucher said.

The United States began testing its engagement approach with North Korea in 1994, after it determined it had produced enough plutonium at a nuclear facility for one or two bombs.

Enemies since the 1950-53 Korean War, the two sides negotiated an "Agreed Framework" under which North Korea froze its nuclear weapons program in return for a U.S. vow to provide two nuclear power reactors and oil supplies worth $5 billion.

Boucher noted that while members of the U.S. Chamber of Commerce are planing to travel to North Korea to explore possibilities for trade, initial options seemed limited given the state of the cash-strapped economy in the communist country.

Washington has said the warming of relations on the Korean peninsula would not lead to a withdrawal of the 37,000 U.S. troops posted in South Korea.

"Our troops are there as long as we and the South Koreans think they're necessary for defense," Boucher said. "That situation hasn't really changed at this stage."