The three countries, plus Gambia, on Friday found themselves added to nations such as Iran, North Korea and Syria already languishing on the lowest tier of the State Department's annual report into human trafficking - a designation which could trigger US sanctions.
US Secretary of State John Kerry said the 2014 Trafficking in Persons report "is not just a book ... filled with stories that will touch you.
"This is a call to action. It's a call to conscience. It is a reminder of what happens in many dark places that need light," he told a ceremony to unveil the report.
"Wherever rule of law is weak, where corruption is most ingrained and where populations can't count on the protection of governments and of law enforcement, there you find zones of vulnerability to trafficking," Kerry said.
"But wherever rule of law is strong, where individuals are willing to speak out and governments willing to listen, we find zones of protection."
The scale of human trafficking is staggering. The International Labor Organization estimates about $US150 billion ($A162.29 billion) in profits are generated annually from trafficking, of which $US99 billion goes to the sex industry.
US Secretary of State John Kerry holds up the 2014 Trafficking in Persons Report while speaking at the US Department of State in Washington. (Getty)
And an estimated 20 to 27 million people are believed to live in slavery around the world.
Tens of thousands of the world's trafficking victims end up in Thailand as migrants from neighbouring countries "who are forced, coerced, or defrauded into labour or exploited in the sex trade," the report said, which was carried out before the military coup.
A high number are exploited in the fishing industry as well as garment factories or end up as domestic maids.
"Anti-trafficking law enforcement efforts remained insufficient compared with the size of the problem in Thailand, and corruption at all levels hampered the success of these efforts."
But Thailand hit back, saying they were "disappointed" and that they "respectfully disagree with the State Department's decision".
The report "did not recognise our vigorous, government-wide efforts that yielded unprecedented progress and concrete results," Thailand's ambassador to the US, Vijavat Isarabhakdi, said in a statement.
Malaysia was also downgraded to the so-called Tier 3, after ignoring warnings to draw up a plan to comply with "the minimum standards for the elimination of trafficking".
Many Malaysian recruitment companies bring in workers who incur huge debts to people smugglers and ending up working in bondage on farms, fishing boats or again as prostitutes.
Those who manage to escape are often jailed by the Malaysian authorities - sometimes for as long as a year - faulted by the State Department for "flawed and inadequate" efforts to improve the country's victim protection program.
Venezuela too found itself back on lowest ranking, after having been on the State Department's Tier Two watch list since 2012, because it has no "written plan" for the elimination of trafficking.
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