[GHC] #14661: Cannot derive (newtype I a b = I (F a -> F b) deriving newtype Category) for type family F

[GHC]

#14661: Cannot derive (newtype I a b = I (F a -> F b) deriving newtype Category)
for type family F
-------------------------------------+-------------------------------------
           Reporter:  Iceland_jack   |             Owner:  (none)
               Type:  bug            |            Status:  new
           Priority:  normal         |         Milestone:
          Component:  Compiler       |           Version:  8.4.1-alpha1
           Keywords:                 |  Operating System:  Unknown/Multiple
  DerivingStrategies, deriving,      |
  TypeFamilies                       |
       Architecture:                 |   Type of failure:  None/Unknown
  Unknown/Multiple                   |
          Test Case:                 |        Blocked By:
           Blocking:                 |   Related Tickets:
Differential Rev(s):                 |         Wiki Page:
-------------------------------------+-------------------------------------
 This works fine

 {{{#!hs
 {-# Language PolyKinds #-}
 {-# Language GADTs #-}
 {-# Language GeneralizedNewtypeDeriving #-}
 {-# Language InstanceSigs #-}
 {-# Language RankNTypes #-}
 {-# Language ScopedTypeVariables #-}
 {-# Language StandaloneDeriving #-}
 {-# Language TypeApplications #-}
 {-# Language DataKinds #-}
 {-# Language DerivingStrategies #-}
 {-# Language TypeFamilies #-}

 import Data.Kind
 import Control.Category
 import Prelude hiding (id, (.))
 import Data.Coerce

 data TY = TI | TB

 type family
   Interp ty where
   Interp TI = Int
   Interp TB = Bool

 newtype Ixed :: TY -> TY -> Type where
   Ixed :: (Interp ix -> Interp ix')
        -> (Ixed ix ix')
   -- deriving newtype Category

 instance Category Ixed where
   id :: forall a. Ixed a a
   id = coerce (id @(->) @(Interp a))

   (.) :: forall b c a. Ixed b c -> Ixed a b -> Ixed a c
   (.) = coerce ((.) @(->) @(Interp b) @(Interp c) @(Interp a))
 }}}

 This instance can **not** be derived using `newtype` deriving. Commenting
 the `Category`-instance out and uncommenting `deriving newtype Category`
 results in an error

 {{{
 $ ghci2 -ignore-dot-ghci hs/164-trac.hs
 GHCi, version 8.5.20180105: http://www.haskell.org/ghc/  :? for help
 [1 of 1] Compiling Main             ( hs/164-trac.hs, interpreted )

 hs/164-trac.hs:28:20: error:
     • Can't make a derived instance of
         ‘Category Ixed’ with the newtype strategy:
         cannot eta-reduce the representation type enough
     • In the newtype declaration for ‘Ixed’
    |
 28 |   deriving newtype Category
    |                    ^^^^^^^^
 Failed, no modules loaded.
 Prelude>
 }}}

 I may have asked this before, but can we make GHC smart enough to derive
 this instance? It consists entirely of the right visible type application
 of `method`: `method = coerce (method @a @b @..)`

-- 
Ticket URL: <http://ghc.haskell.org/trac/ghc/ticket/14661>
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