The Sri Lankan government is apparently abandoning the garment sector if press reports pver the weekend are to be believed. Given that the EU has withdrawn its GSP+ concession and the US is investigating its version of GSP, this is perhaps just the government accepting that garments are going to be hard to sell if the country's human rights record is not improved. But given that garments remain Sri Lanka's top export earner (despite a 13% fall in the first quarter of 2010 alone) the repercussions for foreign exchange will be significant.
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