Historically, Cambodia has aligned itself with the Soviet bloc, maintaining close ties with its neighbor, Vietnam. After the 1993 elections, closer ties with the United States and ASEAN countries were gradually established. In 1995 and 1996, both the United States and Japan promised increased foreign aid and investment. Hun Sen's 1997 coup deferred Cambodia's admission into ASEAN and led to the termination of Western aid and investment.
Following the formation of the coalition government in 1998, Hun Sen sought to repair the damage. Japan and the European Union (EU) announced the resumption of economic links with Cambodia. He continued to appeal to other countries for the reinstatement of foreign economic investment and aid. In May 1999, Cambodia was finally accepted as the tenth member of ASEAN, earning the country new respectability and the opportunity to participate in regional policy conferences.
When the Cambodian government agreed to import hazardous waste and garbage from Taiwan, the decision led to a series of riots in Sihanoukville. In March 1999, the responsible party (Formosa Plastics) pledged to remove the toxic wastes. Human rights activists who had been arrested for protesting the toxic dumping were released, and the government banned future import of toxic waste.
During a June 1999 visit by Vietnamese Communist Party officials, Vietnam and Cambodia agreed to end border disputes, but border tensions continued with Thailand. Relations with Thailand took a dramatic turn for the worse when rioters burned the Thai embassy and several Thai-associated businesses in Phnom Penh on 29 January 2003, reportedly because of rumors that a Thai television actress claimed that the Angkor Wat temples should belong to Thailand. Military planes evacuated Thai citizens from Cambodia, diplomatic relations were downgraded, and Thai aid projects were suspended. Thai prime minister Thaksin Shinawatra blamed Hun Sen for being slow to quell the riots and for remarks that may have stirred the violence.