I want to see some real diplomacy upgrades. Right now an Alliance basically means we cannot attack each other for a few seconds. I want to see real advantages:
Trade: Trades don't care about war. They will trade with anyone of any species. You should be able to boost the trade by signing contracts and to lower the trade with embargoes against common enemies. Trade ships should be divided into 2 groups. Neutral freelancers that cannot be attacked by anyone but pirates and national traders that can be attacked by anyone. The neurals always visit all tradeports unless there is an embargo (depending on the number of players. If 3 Players have an embargo against 2 other ones(6 total) the neutral trade will be decreased by 50%). The national traders only visit own or allied tradeports.
Pirates: I agree that there is no reason why pirates should fight to the end. They should attack trade ships randomly for a couple of minutes in a system. As long the pirates are in this system no traderoute can pass. This also means that the "longest trade route" is disrupted. If the pirates are heavily outnumbered they fill flee to another system. They should prefer non-colonizable systems like nebulas and should not engage starbases. Priates have no Homebase and can only be killed if all pirate ships are dead at the same time(They replenish losses after a while and will try to flee before the last one dies). If they are driven to a planet they will sit at the edge of the grav well and hunt traders rather than assaulting the defenses.
Mercenaries: The repalcement for that what pirates are now. A powerful task to raid planets. The more money you give to them the higher the chance that the assault will be more massive. The mercenaries have a base that is defended by a powerful über-Cap consisting of salvaged parts of all three fractions(May be 3 variations of the ship). The ship will not be destroyed but will shut down after receving more than 90% damage and can be captured if the merc-planet is aquired. Before the mercs attack they will blackmail the current target for resources to attack someone else(expansive) Mercs will not attack traders as they are not mindless criminals.
Common technology: There should be a real advantage to have allies of a specific Type. For example technology transfer. An alliance between Tec and Advent could build a new medium Cruiser using strong weapons(TEC) and Psi(Advent) abilities. If your ally is the same species both parties get a small discount on their ordinary ships as they can produce in a larger scale together. The same would be possible with super weapons. For example a TEC-Advent alliance again. The planetshieldtech of the TEC combined with the superior understanding of shields of the Advend leads to the development of a Planetrary shield generator that absorbs 95% of incoming damage an renders it immune to planet cannons for the planet the generator is build on and all planets up to two phase jumps away. If the alliance breaks down the acquired technology will not be buildable anymore and will shut down after 10 min because of the lack of maintenance. The only way to prevent that is to reestablish the technology or to research a maintenance technology.