The Trade Promotion Authority Bill signed by President Barack Obama last week includes an important clause stipulating that the United States will not trade with countries that boycott Israel.

This clause is supposed to protect Israel from an economic boycott. But the same clause, which authorizes the president to take all measures to protect trade with Israel from politically motivated acts, says the protection will apply not only to Israel but to territories controlled by Israel.

The laws sponsors intended to protect products from the settlements, as though they were an inseparable part of Israel. But this attempt to blur the border between Israel and the occupied territories got a cold reception from the president. Obama made it clear that despite the wording of the legislation he signed, he does not intend to protect products made in the territories.

The United States, a State Department Press Office statement made clear on Tuesday, objected and objects to the settlement policy and has never recognized the territories as part of the State of Israel.

This policy is shared by the states of the European Union, 16 of whose foreign ministers signed a letter last April in favor of labeling products from the settlements.

The American administrations sharp, prompt response should not come as a surprise. Prime Minister Benjamin Netanyahu has made it clear he does not foresee a peace solution with the Palestinians during his term, while Defense Minister Moshe Yaalon said he does not foresee one in our generation. The two states for two peoples formula – which the American administration supports, together with most states in the world – has been trampled and crushed by Israels government. In view of all this, it was necessary to underline in bold the indistinct borderline between Israel and the territories.

Israel can once again utter the wail of the robbed Cossack, blame Obama for abandoning Israel and even say the president supports BDS. But it should be stressed immediately that Obama does not boycott Israel and the bill he signed explicitly protects it from such actions.

But when Israel insists on annexing the settlements, it can only expect the international community to step up its policy of distinguishing between Israel and the territories.

The clear, pointed American message is not directed only at Israels government or the trade agreement partners. The message makes it clear to the settlers and to Israeli producers in the territories that the world markets are closing off to their goods, and that these business people had better give profound consideration to their continued investments in the settlements.

Perhaps economic reason will prevail where strategic and political reason died, and economic common sense will lay down the political milestones along the Green Line.