diff --git a/Data/Text/Show.hs b/Data/Text/Show.hs
--- a/Data/Text/Show.hs
+++ b/Data/Text/Show.hs
@@ -50,19 +50,19 @@
 unpackCString# addr# = unstream (S.streamCString# addr#)
 {-# NOINLINE unpackCString# #-}
 
-{-# RULES "TEXT literal" [2] forall a.
+{-# RULES "TEXT literal" [1] forall a.
     unstream (S.map safe (S.streamList (GHC.unpackCString# a)))
       = unpackCString# a #-}
 
-{-# RULES "TEXT literal UTF8" [2] forall a.
+{-# RULES "TEXT literal UTF8" [1] forall a.
     unstream (S.map safe (S.streamList (GHC.unpackCStringUtf8# a)))
       = unpackCString# a #-}
 
-{-# RULES "TEXT empty literal" [2]
+{-# RULES "TEXT empty literal" [1]
     unstream (S.map safe (S.streamList []))
       = empty_ #-}
 
-{-# RULES "TEXT singleton literal" [2] forall a.
+{-# RULES "TEXT singleton literal" [1] forall a.
     unstream (S.map safe (S.streamList [a]))
       = singleton_ a #-}
 
diff --git a/changelog.md b/changelog.md
--- a/changelog.md
+++ b/changelog.md
@@ -1,3 +1,11 @@
+1.2.1.3
+
+* Bug fix: As it turns out, moving the literal rewrite rules to simplifier 
+  phase 2 does not prevent competition with the `unpack` rule, which is
+  also active in this phase. Unfortunately this was hidden due to a silly
+  test environment mistake. Moving literal rules back to phase 1 finally
+  fixes GHC Trac #10528 correctly.
+
 1.2.1.2
 
 * Bug fix: Run literal rewrite rules in simplifier phase 2.
diff --git a/tests/LiteralRuleTest.hs b/tests/LiteralRuleTest.hs
new file mode 100644
--- /dev/null
+++ b/tests/LiteralRuleTest.hs
@@ -0,0 +1,21 @@
+{-# LANGUAGE OverloadedStrings #-}
+
+module LiteralRuleTest where
+
+import Data.Text (Text)
+
+-- This should produce 8 firings of the "TEXT literal" rule
+strings :: [Text]
+strings = [ "abstime", "aclitem", "bit", "bool", "box", "bpchar", "bytea", "char" ]
+
+-- This should produce 7 firings of the "TEXT literal UTF8" rule
+utf8Strings :: [Text]
+utf8Strings = [ "\0abstime", "\0aclitem", "\xfefe bit", "\0bool", "\0box", "\0bpchar", "\0bytea" ]
+
+-- This should produce 4 firings of the "TEXT empty literal" rule
+empties :: [Text]
+empties = [ "", "", "", "" ]
+
+-- This should produce 5 firings of the "TEXT empty literal" rule
+--singletons :: [Text]
+--singletons = [ "a", "b", "c", "d", "e" ]
diff --git a/tests/Makefile b/tests/Makefile
--- a/tests/Makefile
+++ b/tests/Makefile
@@ -1,5 +1,10 @@
 count = 1000
 
+all: coverage literal-rule-test
+
+literal-rule-test:
+	./literal-rule-test.sh
+
 coverage: build coverage/hpc_index.html
 
 build: text-test-data
@@ -32,4 +37,4 @@
 clean:
 	rm -rf dist coverage .hpc
 
-.PHONY: build coverage
+.PHONY: build coverage all literal-rule-test
diff --git a/text.cabal b/text.cabal
--- a/text.cabal
+++ b/text.cabal
@@ -1,5 +1,5 @@
 name:           text
-version:        1.2.1.2
+version:        1.2.1.3
 homepage:       https://github.com/bos/text
 bug-reports:    https://github.com/bos/text/issues
 synopsis:       An efficient packed Unicode text type.