(CNN) Myanmar has joined China, Syria and South Sudan as being among the countries doing least to tackle human trafficking, according to the US State Department's latest annual Trafficking in Persons (TIP) report.
The US report specifically cited the ongoing Rohingya refugee crisis as the reason for downgrading Myanmar to Tier 3, the bottom rung of the TIP scale, which rates the best performing countries at Tier 1.
The report said Myanmar's military operations in northwestern Rakhine State had "dislocated hundreds of thousands of Rohingya and members of other ethnic groups, many of whom were subjected to exploitation in (Myanmar), Bangladesh, and elsewhere in the region as a result of their displacement."
At least 700,000 Rohingya have fled Rakhine State since last year, mainly into neighboring Bangladesh, after the Myanmar military launched clearance operations the government claims were targeting terrorist groups. The US and UN human rights chief have since described the operations as "ethnic cleansing."
Many of those fleeing "were subjected to exploitation -- or transported to other countries for the purpose of sex trafficking -- as a result of their displacement," the US State Department report said, adding that refugees were also vulnerable to "forced labor" in jade mines and other industries.
In contrast, the report praised Bangladesh for "making significant efforts" to tackle the extra challenges presented by the influx of refugees from Myanmar, most of whom are living in huge government-run camps on the border, though it warned more efforts were needed. Bangladesh remained on the Tier 2 Watch List for the second year in a row.
Women in the camps are particularly vulnerable, trafficked within Bangladesh and into India to serve in the sex trade. "Some of these girls are 'traded' between traffickers over the internet," the report said. India is rated as Tier 2.
According to the State Department, the TIP report is "the world's most comprehensive resource of governmental anti-human trafficking efforts."
It rates nations on how effectively governments are in tackling human trafficking on a scale from the worst on Tier 3 to best on Tier 1. Before being downgraded to Tier 3, countries are put on the Tier 2 Watch List. If they remain on the list for over two years without improvement, they are automatically downgraded.
A Tier 3 rating can trigger non-trade related sanctions and lead to restrictions on US foreign assistance, but these can be overruled by the US President.
The overall picture for Southeast Asia in the report is dire, but Japan has been upgraded from Tier 2 to Tier 1, and the Philippines is listed as Tier 1 for the third year in a row. Thailand was upgraded to Tier 2 after two years on the watch list.
While Japan and Thailand improved, other Southeast Asian and Pacific nations were downgraded, with Laos and Papua New Guinea dropping to Tier 3 along with Myanmar.
"Papua New Guinea is a source, transit, and destination country for men, women, and children subjected to sex trafficking and forced labor," the report said, adding that 2017 was the country's fifth year in a row with zero human trafficking convictions.
Despite some signs of improvement, Laos was automatically downgraded after fours years on the Tier 2 Watch List.
In East Asia, both North Korea and China remained on Tier 3, after then Secretary of State Rex Tillerson did not grant China a waiver last year, leading it to being downgraded from the Tier 2 Watch List.