YES

TRS:

  merge(x,nil()) -> x
  merge(nil(),y) -> y
  merge(++(x,y),++(u(),v())) -> ++(x,merge(y,++(u(),v())))
  merge(++(x,y),++(u(),v())) -> ++(u(),merge(++(x,y),v()))

linear polynomial interpretations on N:

  merge_A(x1,x2) = x1 + x2
  merge#_A(x1,x2) = x2
  nil_A = 0
  nil#_A = 0
  ++_A(x1,x2) = x1 + x2 + 1
  ++#_A(x1,x2) = 2
  u_A = 1
  u#_A = 0
  v_A = 1
  v#_A = 1

precedence:

  merge = nil > ++ > v > u