My only try in this mission so far ended rather hilariously. For some odd reason, within the first 2 minutes of the mission, I got reports of "loud explosion" on the sub's bearing. I then found it on my HF, but it wouldn't pick it up as contact. It soon became very apparent to me that the sub was dead and gradually sinking deeper and deeper... blew itself up? What happened? I have no idea...
I then spent some time running from the merchant and getting no points, until finally deciding to give up
As for evading the merchant, I highly suspect that the ACTUV is far more maneuverable than the merchant. So even if you are slower, you should be able to dodge him and force him to overshoot.