So how are they able to deliver at such low rates and why can’t other work it out and use that as well
AFAICT it means that postal costs are only paid in the originating country, and receiving countries are still obliged to deliver.
If I order a $2 item from aliexpress with free shipping, like some baseball caps I just found, nobody is paying the $10 postage fee it would cost just on shipping to send one within Australia, in China or anywhere else. Let alone the $25 it would cost to send the item the other way, back to China.
The treaty distorts the cost of delivery massively in favour of countries with low internal post costs, and ends up creating absurd situations like this.