WASHINGTON (AP) ― Failure to meet minimum standards in fighting human trafficking has landed Thailand and Malaysia on a State Department blacklist, a move that could strain relations with two important U.S. partners in Asia.

The department, however, improved its rating of strategic rival China, citing Beijing’s steps to abolish reeducation-through-labor camps.

U.S. Secretary of State John Kerry launched the annual U.S. assessment of how 188 governments around the world have performed in fighting the flesh trade and other forms of exploitative labor.

Thailand had mounted a determined campaign to prevent a downgrade that could exact a reputational cost on its lucrative seafood and shrimp industries for which America is a key market.

Thai ambassador to the U.S., Vijavat Isarabhakdi expressed disappointment with his country’s downgrade, saying the report did not recognize “our vigorous, government-wide efforts that yielded unprecedented progress and concrete results.”

But he said Thailand would continue to collaborate closely with the U.S. on combating human trafficking and in other areas.

The Trafficking in Persons Report is one of several annual assessments issued by the department on human rights-related topics, but it’s unusual in that it ranks nations, which can ruffle diplomatic feathers. It is based on the actions governments take, rather than the scale of the problem in their country. Globally, more than 20 million people are believed affected.

“There cannot be impunity for those who traffic in human beings. It must end,” Kerry said, describing it as slavery in the 21st century and an illicit business generating annual profits of $150 billion.

Thailand and Malaysia are among 23 countries to receive the lowest ranking, “tier 3.” Incumbents at that level include Iran, North Korea, Russia, Saudi Arabia, Syria and Zimbabwe.

Two other nations were also demoted to that level: Venezuela and Gambia. China, put on tier 3 last year, was elevated to a watch list.