GHC (even without -fglasgow-exts) rejects the following:

        newtype Foo a = Foo a

        instance Eq a => Eq (Foo a) where
                Foo x == Foo y = bar
                        where   bar :: a
                                bar = undefined

It seems to treat the inner a as bound to the a in the instance header,
and thus not universally quantified.
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