The US has said eight more countries - including its four of its Arab allies in the war on terror - could face sanctions for failing to fight human trafficking.
All Gulf countries are under pressure to stop using child jockeys
Kuwait, Saudi Arabia, the United Arab Emirates, Qatar were all cited in a US State Department's annual report on trafficking worldwide.
The report said up to 800,000 people - mainly women and children - were being trafficked across borders each year.
US Secretary of State Condoleezza Rice
said it was "a modern form of slavery".
Also named in the report were Bolivia, Cambodia, Jamaica, Togo, Myanmar, Cuba, Ecuador, North Korea, Sudan and Venezuela.
The latter six nations had been named in the 2004 list.
'Third tier nations'
The 256-page Trafficking In Persons report said most of the trafficked people in the four Gulf nations were from South Asia and Africa.
It said victims were generally forced to work as domestic servants and labourers, but also included women prostitutes and boy camel jockeys as young as three.
The report said the trafficked children were often not properly fed or educated and were controlled by beatings.
"Nowhere on Earth is it allowable to systematically abuse children for sport, or.. to look the other way while sex traffickers seize young women," said John Miller, head of the US State Department trafficking office.
The report downgraded the four Gulf states to the lowest level of compliance - the so-called "third tier".
They now face the threat of sanctions if they do not take steps to improve their record in the next three months, the BBC's State Department correspondent Jonathan Beale says.
But releasing the report, Ms Rice said the US and other prosperous nations also bore a heavy responsibility in tackling human trafficking, our correspondent says.