Don't forget that starting with 1.04, CSA get more VP each turn (not much, but this is better than the pre-patch situation where USA was receiving more). And with higher VP (compared to your opponent), FE will steadily rise.
As for the Emancipation proclaimation: The USA need 80 morale to issue it, the condition is not much stringent, because the AI must have a real chance in issuing it.
About the why of the Foreign Entry fall, this can lead us to a prolonged historical discussion. Let's just say that it is widly accepted that the British would have been even more reluctant to lend an hand to the CSA supporting slavery if USA openly recognized that the slavery system should not be maintained.