Use io.open() instead of codecs.open().

(builtins.open() is io.open() in Python 3.)

setup.py

 #!/usr/bin/env python
 """Distutils setup file, used to install or test 'setuptools'"""
-import sys
+import io
 import os
+import sys
 import textwrap
-import codecs
 
 # Allow to run setup.py from another directory.
 os.chdir(os.path.dirname(os.path.abspath(__file__)))
@@ -82,7 +82,7 @@ class test(_test):
                 f.write(ep_content)
 
 
-readme_file = codecs.open('README.txt', encoding='utf-8')
+readme_file = io.open('README.txt', encoding='utf-8')
 
 # the release script adds hyperlinks to issues
 if os.path.exists('CHANGES (links).txt'):

setuptools/tests/test_svn.py

 # -*- coding: utf-8 -*-
 """svn tests"""
 
-
+import io
 import os
+import subprocess
 import sys
 import unittest
-import codecs
-import subprocess
 from setuptools.tests import environment
 from setuptools.compat import unicode, unichr
 
@@ -54,7 +53,7 @@ class TestSvnVersion(unittest.TestCase):
 def _read_utf8_file(path):
     fileobj = None
     try:
-        fileobj = codecs.open(path, 'r', 'utf-8')
+        fileobj = io.open(path, 'r', encoding='utf-8')
         data = fileobj.read()
         return data
     finally: