Vietnam's ambassador to Colombo Ton Sinh Thanh told an economic forum in Colombo, held with Sri Lanka's Institute of Policy Studies, that the two countries should start work on a preferential trade agreement to reach the target.
A start could be made by identifying 10 to 20 items of "most promising products for export from each country" from which import duties will be waived, he said.
Chandana Karunaratne, research assistant at the Institute of Policy Studies said two way trade between the two countries had risen to 113 million US dollars in 2011 from 92.3 million US dollars a year earlier.
Top exports from Sri Lanka included knitted fabric, animal feed, rubber products, and top imports included, fibre, rubber products, plastics, iron and steel and vehicles.
Ambassador Thanh said the two governments could also give 10 stalls to each other in international trade fairs held in each country.
Vu Xuan Truong, from Vietnam's foreign ministry said such moves had proved highly successful in India, where Ambassador Thanh served earlier, with the two countries boosting trade to several billion dollars a year.
Truong said Vietnam has committed to lowering import duties under free trade arrangements of the Association of South East Asian Nations.
ASEAN has been rapidly lowering trade barriers to help their citizens interact with each other. ASEAN visa free travel has also triggered a massive tourism and aviation boom in the region.
Truong said all agreements signed by the two countries should be published on the websites of their embassies in Colombo and Hanoi.
"The users of these agreements are the people and the companies," he said. "They should know about them to make use of them."
He said Vietnam has become one of the most open countries, with imports and exports of about 200 billion US dollars.
In 1995 it joined the ASEAN, in 1996, its free trade arrangements and it joined the WTO in 2007.
"Trade is 180 percent of gross domestic product, making Vietnam one of the most open countries in the world," Truong said.
"The world average for trade is 50 percent."
From 1986, Vietnam stopped its controlled and planned economy, started giving citizens and others property rights, liberalized market prices and invited investors from around the world to come to Vietnam.
The country now gets about 10 billion US dollars of foreign investment a year.
After the East Asian crisis, it started to focus more on economic and exchange rate stability and has managed to slash poverty.
Vietnam's economy overheated in recent years with high credit growth due to 'stimulus' and the country's central bank has since hit the brakes to prevent further exchange rate depreciation and inflation.