Perhaps, you can't engage in diplomacy or trade with another fraction unless you have an embassy in with that fraction.
No Embassy = Minimal Trade Agreements, No Defense Pacts, No Alliances.
Embassy = Enhanced Trade Agreements, Opportunity for Defense Pacts, Alliances, Marriages, etc.
That's a good reason to accept an ambassador from another fraction.
If you accept an ambassador from fraction A then you automatically have the right to see send an Ambassador to Fraction A.
Will an AI fraction accept your ambassador? Its a function of Fraction, Relative Power, the Ambassador's Charisma rating and the AI's strategy.
- Empire fraction is less likely to accept an ambassador from a Kingdom Fraction
- More chaismatic ambassador is likely to be accepted
- AI pursuing a diplomatic victory will tend to accept ambassadors from likeminded fractions.