Hrm...I think it should be more explicit. You get no foreign trade unless you sign a Trade Pact with another civ. That option isn't available in the Diplo dialogs until you get Currency AND are connected to the other civ's capital (via roads, water, or combo). If two other civs are only connected to one another civ through your lands, you can "negotiate" a trade pact between those two civs, but they cannot with one another. So, in the "discuss" Diplo dialog, one option would be "form a trade pact with" and then when you click it, it would list any civs connected to you but not to them. Successfully setting up a third party trade pact gives you a strong Diplo boost with each third party, as well as a portion of the proceeds.