Unless I'm missing something, you can crush an AI down to its last city, then keep it there as a 'pet', while maintaining an econ treaty. Doing so gives you a _vastly_ disproportionate econ boost.
The boost from an econ treaty/capital trade should be proportional to both the length of the treaty and the size/power/econ of the kingdom you are trading with - there's no reason I should be rewarded for gaming the system by keeping their last city alive.