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diff --git a/testsuite/tests/simplCore/should_compile/T2520.hs b/testsuite/tests/simplCore/should_compile/T2520.hs
new file mode 100644
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+++ b/testsuite/tests/simplCore/should_compile/T2520.hs
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+{-# LANGUAGE GADTs #-}
+
+-- Trac #2520: a bug in the specialiser when we tried to
+-- quantify over an Internal Name
+
+module Types where
+
+data Prod a b = Prod a b
+
+data Nil = Nil
+
+class ProdSel f where
+   nil :: f Nil
+   prod :: f x -> f y -> f (Prod x y)
+
+instance ProdSel SqlFields where
+   nil = SFNil
+   prod = SFProd
+
+{-# SPECIALIZE reproject :: SqlFields a -> SqlFields a #-}
+
+reproject :: ProdSel f => SqlFields a -> f a
+reproject SFNil = nil
+reproject (SFProd a b) = prod (reproject a) (reproject b)
+
+data SqlFields a where
+  SFNil :: SqlFields Nil
+  SFProd :: SqlFields a -> SqlFields b -> SqlFields (Prod a b)