GHC fails to import instance

The following code compiles in 7.8.4 but fails to compile in 7.10.1.

Tagged.hs

module Tagged where
import Control.Monad.Trans
newtype TaggedT s m b = TagT (m b)
instance MonadTrans (TaggedT s)

Main.hs

import Control.Monad.Trans.Class
import Tagged

returnT :: (MonadTrans t) 
        => t m a -> t m a
returnT a = undefined

f :: TaggedT Int m a -> TaggedT Int m a
f = returnT

GHC complains

    Could not deduce (MonadTrans (TaggedT Int))
      arising from a use of ‘returnT’

If I change the import in Main to Control.Monad.Trans, 7.10.1 accepts the program. Since the import Control.Monad.Trans is actually a folder, the class MonadTrans must refer to the definition in Control.Monad.Trans.Class, so GHC should find the instance.

Trac metadata

Trac field	Value
Version	7.10.1
Type	Bug
TypeOfFailure	OtherFailure
Priority	normal
Resolution	Unresolved
Component	Compiler
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