13. Trade, Diplomacy & Sanctions

13.1 Who conducts foreign policy

Since v0.7 every negotiator and ratifying body below is an AI persona or AI body; human citizens influence foreign policy only through their system’s levers (Section 8.5) – and in Veldwood by mandatory referendum.

13.2 Treaty types

13.3 Sanctions and embargoes

• Embargo: a nation forbids all trade with a target (its own merchants and the World Exchange route).
• Targeted sanctions: bans on specific goods (e.g., arms, signature resources) or on named officials (freezes their foreign assets and exchange access).
• Multilateral sanctions: treaties among several nations; the target’s prices and Stability are hit in proportion to how much trade it loses.
• Evasion: smuggling routes (sea lanes, Wildlands caravans) are a gameplay activity with interdiction risk – smugglers are a legitimate career in some nations and a crime in others.
• Feedback: sanctions also hurt the sanctioning economy (lost exports), so they are a real choice, not a free punishment.

13.3.1 How sanctions and embargoes hit currencies (v0.3)

• Suspension rule: only a multilateral sanctions treaty whose signatories account for at least 50% of settled world trade over the last game year can suspend a nation from Tessera settlement, for at most 60 real days at a time, renewable by the same treaty [ASSUMPTION]. Humanitarian goods (food, medicine) always settle. (Threshold and humanitarian exemption confirmed in v0.4.)
• Korund is already outside the system, so sanctions bite it through barter partners and the State Trade Bureau’s Tessera earnings rather than through its currency.
• Varkand at Red Alert freezes its own foreign balances – a self-imposed partial embargo that sanctioners can exploit.

13.4 Diplomatic play

• Embassies are buildings in capitals staffed by AI ambassadors; human visitors can attend receptions and trade fairs there.
• Summits are scheduled events where AI leaders meet in a neutral hall (a 3D scene); citizens of the participating nations can watch the public sessions live, with transcripts released per each nation’s transparency rule.
• World Reputation per nation tracks broken treaties, war conduct, aid and, since v0.3, monetary conduct (surprise devaluations, debasements, defaults on swap lines); low Reputation raises trade costs and makes alliances harder.
• Faith in diplomacy: nations that share a state or established faith get a small treaty-cost discount; holy-site access and missionary access are treaty clauses; the Oracle of Ilmar can intervene through the Lumen Canon abroad (Section 14.7).
• Diplomacy is the main bridge between nations: as citizenship is permanent, cross-nation social contact happens in diplomatic halls, trade fairs and the global channel (Section 18).

13.5 AI-to-AI diplomacy (new in v0.7)

Nations’ AI leaders negotiate with each other directly. Talks are LLM-driven dialogue over structured treaty objects: the words are generated, the terms are typed data validated by the rules engine.

1. Opening: an AI foreign minister (or head of government) opens a channel with a counterpart, citing a reason from its digest (trade gap, border incident, sanctions, shared enemy).
2. Offer / counter-offer: each turn carries a structured proposal (treaty type from Section 13.2, parties, terms, duration) plus in-character text. Each side’s utility model scores the proposal against its goals and citizen-input weights; the LLM decides accept, counter or walk away within a bounded number of rounds (e.g., 6 [ASSUMPTION]).
3. Ratification: an accepted draft goes to the nation’s ratifying body (Section 13.1) – AI votes counted by the engine, plus any binding citizen step (Veldwood referendum; Fulmara share vote).
4. Publication: treaties are public on signature; talk transcripts follow each nation’s transparency rule (democracies publish after signature or collapse; Korund shows only state-media versions).