Thailand came off the United States' list of narcotics producing countries, but Burma was cited as "failing miserably" even though it reported substantial reductions in opium production.
In President Bush's latest report card to Congress on drug trafficking, he named Afghanistan, China, India, Laos, Burma, Pakistan, and Vietnam as Asia's hotspots for illicit drug transit and production.
Afghanistan retained its status as the world's largest opium producing nation, but Thailand came off the list of 22 countries.
For years, the shared borders of Thailand, Burma and Laos formed an area known as the "Golden Triangle" because of the vast wealth created from opium production and trafficking.
But western narcotics officials say some drug trafficking has shifted to Laos, Cambodia, and Vietnam, or north to China, as Thailand has cracked down.
The United Nations Office on Drugs and Crime executive director Antonio Maria Costa says Laos remains on the list even though it has reduced opium production by 75 percent since 1998.
"The United Nations certified a significant reduction in the cultivation of opium in Laos," he said. "A reduction of 75 percent, an enormous accomplishment."
The U.S. report cited Burma as "failing demonstrably" for the second consecutive year in adhering to its obligations under international narcotics agreements.
But UNOCD data shows that Burma is curtailing drug production. In 2003, Burma had 63,000 hectares under opium poppy cultivation, down from a peak a decade ago of nearly 166,000 hectares.
The U.S. report also warned that North Korea may be trafficking in heroin and amphetamines to East Asian countries, with U.S. officials accusing North Korea government agents of being involved in the trade. The government in Pyongyang has denied these allegations in the past.
Thailand has reported no significant levels of opium production since 2002. Officials credit a crop substitution program implemented with the UNODC. Thailand's much criticized war on drugs a year ago that left more than 2,000 people dead also gets credit.
Mr. Maria Costa warned that he is seeing evidence of increasing demand for heroin and amphetamine-type drugs, noting that easier cross-border travel and rising incomes contributed to demand.