Thailand's lucrative fishing industry could suffer as a result of today's ruling. Pic: AP.

WASHINGTON (AP) — The United States has blacklisted Thailand and Malaysia for failing to meet its minimum standards in fighting human trafficking, a move that could strain relations with two important U.S. partners in Asia.

The U.S. State Department, however, improved its rating of strategic rival China. The department cited Beijing’s steps to abolish re-education-through-labor camps.

Secretary of State John Kerry on Friday 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 damage the reputation of its lucrative seafood and shrimp industries, for which America is a key market.

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